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DISTRIBUTION AND CUSTOMER SATISFACTION

Objectives
1. Organising of the sales effort both within the enterprise and relative to the distributive network. 2. Planning, organising and controlling the relationships among the institutions and agencies involved in the process of making certain that the product / services are available for consumption by industrial, commercial and household consumers with the end result of effective marketing channel management with focus on channel performance. 3. Develop appreciation for Customer focus through understanding of consumer behaviour, market segmentation, consumerism etc.

Contents
1. Distribution - basic concepts, correlation to other marketing mix elements. Synergy for optimizing marketing effort. 2. Channels - meaning and reasons for existence. 3. Channels - structure, functions and relationships. 4. Retailing - strategic considerations, 5. New trends in Indian retailing 6. Channel - planning framework, and designing. 7. Channel management and competitiveness. 8. Logistics - structure and strategy. 9. Customer service, meaning and scope. 10. Consumer, customer specific - basic considerations, conceptual framework for understanding consumer decisional dynamics. 11. Environmental factors influencing consumer Behavior. Understanding customers value systems and satisfaction. Market segmentation, typologies and methodology.

References
1. Sales & Distribution Management, S.L.Gupta, Excel. 2. Still, Cundiff, & Govoni, Sales Management. 3. Stern, L.W., EI Ansari, A.I., Coughlan, A.T., Marketing Channels.

Notes:
a. Write answers in your own words as far as possible and refrain from copying from the text books/handouts. b. Answers of Ist Set (Part-A & Part-B), IInd Set (Part-C, Part-D), IIIrd Set (Short Answer Questions) and Case Study must be sent together. c. Mail the answer sheets alongwith the copy of assignments for evaluation & return. d. Only hand written assignments shall be accepted.

DISTRIBUTION AND CUSTOMER SATISFACTION

A. First Set of Assignments: Part-A : 5 Marks & Part-B : 5 Marks. Each question carries 1 marks. B. Second Set of Assignments: Part-C : 5 Marks & Part-D : 5 Marks. Each question carries 1 marks. C. Third Set of Assignments: 20 Short Answer Questions : 10 Marks. Each question carries marks. Confine your answers to 150 to 200 Words. D. Forth Set of Assignments: Two Case Studies : 10 Marks. Each case study carries 5 marks.

ASSIGNMENTS

PART A
1. Enlist the consideration and the process involved in deciding the distribution strategy for an organization marketing consumer electronics. 2. Discuss in detail, the concept of supply chain management and its relevance to the supplier and the end user for marketing excellence. 3. Indian retailing system is in a state of metamorphosis; discuss advantages and disadvantages of shopping malls, sky shopping and ATMs and their effect on consumer buying behavior. 4. Trustworthiness, reliability, and dependability are the main characteristics of general retail store next door. Elaborate on as to how P.O.P outlet can influence the consumer choice process to buy a certain product. 5. To globalize a business, is franchising a convenient route? Give reasons for your answer. Discuss with an appropriate example, various types of franchising options available to an Indian organization to go global.

PART B
1. Comment on the statement Marketing has shifted from tricking the customer to blaming the customer to satisfying the customer and now to integrating the customer systematically in the business cites an appropriate example in the Indian context to justify your answer. 2. What are the determinants of customer value and satisfaction, elaborate on as to how leading companies in India produce and deliver them? 3. Using conceptual frame work of value chain, explain how can companies attract and retain their customers? 4. Consumers adopt a product/service for their own reason and not for the reason of the marketer. Enumerate the steps that a consumer would take in deciding to buy a high involvement product. 5. What do you understand by the term unconditional guarantee? Can this concept be applied and work effectively in the Indian market? Site an appropriate example.

PART C
1. Define Need, Need arousal is the trigger for motive / action; differentiate between satiable and insatiable needs? Correlate these needs with Maslows theory of Hierarchy of needs leading to motivation. 2. Discuss with an appropriate example, information technology, increased levels of education, cash on demand, and a growth in double income households has brought about a definite shift in consumer values and behavior. 3. Discuss relevance of the hierarchy of effects model as given by Lavidge. How can a marketer use this model to analyze the target market. 4. Why attitude is considered a central concept in consumer behavior? Consumer attitudes towards products may be one of the most monitored aspects of consumer behavior by the marketers, why is this so? 5. Describe Fishbeins. BI model in detail. How can it be more useful in predicting a particular consumer behavior as compared to other models?

PART D
1. What are the three criteria for a true market segment? Explain using two different examples, why marketers would wish to have both the marketing mix efficiency and systematic behavior criteria satisfied before targeting a particular segment. 2. Discuss the advantage and disadvantages of using demographics as a basis for segmentation. Can demographics and psychographics be used together to segment markets? Illustrate your answer with a specific example. 3. What roles do actual products attributes and perception of attributes play in positioning a product? Find three different toothpaste advertisements, which stress different product attributes and discuss their positioning effectiveness?

4. Many advertisements these days make highly exaggerated claims for their brand, claims which probably cannot be fulfilled. Using your knowledge of cognitive dissonance, asses the wisdom of this technique with a relevant example. 5. Write a detailed note on "consumer protection" as applied to the Indian consumer.

SHORT ANSWER QUESTIONS


1. Distribution should aim at facilitating exchange or actualizing transaction. 2. The fact is intermediaries add to the cost of product to end user, so, why have them? 3. P.O.P influence in triggering of impulse buying. 4. Effect of Distribution channel on the pricing of a product. 5. Areas of conflict in channel management. 6. Major trends in customer service. 7. Customer defection and its impact on business. 8. Role of call centers in enhancing customer relations and management. 9. A satisfied customer is a spokes person and marketer for the company. 10. Five roles played by people in buying decision. 11. Building customer equity through service. 12. How does risk affect consumer decisions and what can the marketer do to alleviate it. 13. Role of opinion leaders in consumer behavior. 14. Why does status play a large role in the purchase of some products and a small role in the purchase of others? 15. Product positioning. 16. Marketers approach to eliminate post purchase dissonance. 17. Comment on, segmentation is perhaps as old as mankind. 18. Consumer life style and AIO patterns. 19. Heavy user segmentation. 20. Consumer data base.

CASE STUDY-1
Where would you find Doberman Pinschers, an architect and four wheels in one place? Answer: in t agonRs electronic campaign opens with an architect on location with his client, an attractive woman. Both get into his black WagonR but suddenly a Doberman jumps at the window, scaring the woman. Racy music plays in the background and a pack of Dobermans chase the car. The architect remains cool, navigating the vehicle through rough terrain, dogs in sustained pursuit. he latest set of 60-second clips showcasing Maruti Udyog Limiteds WagonR. At the end of the chase, he steps out and whistles. The Dobermans come running to their master: the dogs are his. The voice-over concludes: When hes not designing buildings, Ravi relaxes by training his Dobermans. Some of the most interesting people drive the WagonR. What about you? As the architect, the woman and the dogs get into the car and race off, the foreground shows the adline: Inspired Engineering. This 60-second spot has been airing on a bouquet of channels since late last year and unlike most productand feature-laden car commercials, it focuses on the car-owners. What made Maruti go for a people-oriented car campaign? The target audience our client had in mind was based more on psychographics than the demographic profile, says Mohit Hira, senior vice president, Contract Advertising, the agency which executed the spots for Maruti.

Says Ravi G Bhatia, general manager, marketing, Maruti Udyog Limited, Rather than projecting our product as a mass option, weve gone a bit contrarian: buying a WagonR is a deliberate, considered choice. This is not Marutis first set of electronic campaigns for the WagonR. Launched in December 1999, the first set used the Car full of ideas, Challenge boredom and Feel at home adlines and ran mainly in print. Its second set ran from June 2000 to 2002; these positioned the vehicle as a multi-activity vehicle, and were, according to Bhatia, brand descriptors. The Inspired Engineering pitch came shortly after the company launched its WagonR Pride limited edition cars in July 2002, which feature roof rails, body graphics, a rear spoiler and new seat fabrics. We launched these limited editions to test out new features and to create excitement in the market, says Bhatia. After the launch a survey was , commissioned in August and September 2002 to find out the customer profile of the kind of person who buys a WagonR. Additional inputs streamed in from Marutis WagonR website, where an interactive section on the site elicited information about 1,000 WagonR owners in November 2002. It was clear that most of those who had bought the car had done so not because of its looks, but after careful research. Three weeks after the campaign broke, Maruti hired the services of IQ, a market research firm, to elicit feedback. Unlike the standard structured questionnaires, IQ used open-ended projective techniques to elicit free-ranging responses from focus groups in Delhi, Mumbai and Kolkata. One feedback was that the ads definitely rose above the clutter. The effect of the Dobermans in the back of the car, says Bhatia, was that it conveyed a perception of spaciousness. Two additional insights emerged: the car could accelerate, giving the impression of being high-powered and that interesting people drove the car. But the company was a tad disappointed that the last insight didnt come out on top. So the voiceover was modified, although the script remained the same and the music volume was suppressed somewhat in later editions of the ads. Says Contracts Hira: The WagonR kind of person isnt necessarily young, but works 9 to 5 and is someone who is progressive but doesnt want to lose conventionality hes someone who wants to do something thats a bit out of the ordinary. Bhatia agrees, Our hypothesis was that anyone who sees the ad would like to be perceived as being somone who is interesting. Questions 1. Identify the consumer profile and target segment of Wagon-R 2. What is the promotional focus of Wagon-R.? 3. Highlight the USP and UVP of Wagon-R

CASE STUDY-2

KMART FIGHTS BACK al-Mart Stores, the fantastically successful chain of discount stores headquartered in Bentonville, Arkansas, is on top of the world. It is currently rated as the fifth most valuable corporation in the United States, with sales of $32.6 billion in 1990, and the company has just announced its first international expansion, a joint venture with a Mexican retailer. Running slightly behind Wal-Mart, with sales of $32.1 billion in 1990, is Kmart; behind Kmart comes Sears, formerly number one in the United States, with sales of $32 billion. But Wal-Mart , has been growing much faster than either of its rivals, with a 34 percent rate of sales increase since 1980, compared with 8 percent for Kmart. Neither Kmart nor Sears seems ready to give in to the, pressure of Wal-Mart's competition, and Kmart in particular has laid nlans for a comeback. Kmart CEO Joseph Antonini concedes that Kmart made some crucial mistakes in the 1970s by moving away from the concept of the giant store. The company decided that smaller stores could better serve smaller markets, and the company opened 1,100 new stores that were as small as 40,000 square feet, instead of the 80,000-square-foot store that had been Kmart's standard. The company also passed up an opportunity to get into the membership warehouse club market, which has yielded big profits for Wal-Mart, choosing instead to diversify into other kinds of chains such as Builders Square, Waldenbooks, and Pay Less Drug Stores. Today, Antonini's plans call for reversing the pattern of shrinking stores. By the end of 1995, the company will have refurbished, expanded, closed, or relocated almost all of its 2,300 North American stores. And Kmart is moving into the warehouse market through acquisition of existing warehouse clubs. Kmart's old discount stores looked dilapidated, small, and crowded compared to the newer WalMart or Target stores, and prices were often higher. An outdated inventory system meant that items were frequently out of stock. Finally, store personnel were less than friendly and enthusiastic. Kmart's new stores will look like the recently opened prototype in Oak Park, Michigan: brightly lit, with wide aisles, larger racks, big signs, and contemporary graphics. The inventory system has been replaced with computerized point-of-sale registers that are linked by satellite to corporate headquarters, so sales and inventories can be closely tracked. And Antonini communicates directly with all employees several times a month via the satellite system, to explain goals and boost morale. Will Kmart be able to make a turnaround in a declining or static economy? So far, sales at the new Oak Park store have exceeded the sales plan by 40 percent; the store produces $280 in sales per square foot, versus the Kmart average of $189. By the end of 1991 Antonini expects to have 30 percent of Kmart's stores transformed into the new format, and he plans to have completed the overhaul by 1995. Kmart and its CEO are

determined to give Wal-Martand Searsa run for their money. Questions 1. Which of Kmart's recent problems probably affected the retailer's image? Explain. 2. How would you evaluate Kmart's merchandise control? 3. Does Antonini's expansion into warehouse clubs make sense? Why?

COMPETITIVE ANALYSIS & MARKETING STRATEGY


Objectives
The course develops insights into: (a) Identification of the competitors, their objectives, strategies, strengths and weaknesses and response profile. (b) Development of competitive strategies including the competencies to be employed and the marketing strategies to be adopted based on competitors and customer response profiles.

Contents
A. Competitor Analysis 1. Understanding Competition 2. Identifying Companys Competitors 3. Determining Competitors Objectives 4. Identifying Competitors Strategies 5. Assessing Competitors Strengths and Weaknesses 6. Estimating Competitors Reactions 7. Selecting Competitors to Attack and Avoid 8. Designing a Competitive Intelligence System 9. Tools of Strategy Generation 10. Strategic Choice in Various Situations B. Competitive Strategies 1. Basic Competitive Strategies 2. Competitive Positions 3. Market Leader Strategies 4. Market Challenger Strategies 5. Market Follower Strategies 6. Market Nicher Strategies 7. Balancing Customer & Competitor Orientation

References
1. Strategic Market Management, Aaker, David A. 2. Strategic Marketing Management, Richard M.S. Wilson, (Viva)

Notes:
a. Write answers in your own words as far as possible and refrain from copying from the text books/handouts. b. Answers of Ist Set (Part-A & Part-B), IInd Set (Part-C, Part-D), IIIrd Set (Short Answer Questions) and Case Study must be sent together. c. Mail the answer sheets alongwith the copy of assignments for evaluation & return. d. Only hand written assignments shall be accepted.

COMPETITIVE ANALYSIS & MARKETING STRATEGY

A. First Set of Assignments: Part-A : 5 Marks & Part-B : 5 Marks. Each question carries 1 marks. B. Second Set of Assignments: Part-C : 5 Marks & Part-D : 5 Marks. Each question carries 1 marks. C. Third Set of Assignments: 20 Short Answer Questions : 10 Marks. Each question carries marks. Confine your answers to 150 to 200 Words. D. Forth Set of Assignments: Two Case Studies : 10 Marks. Each case study carries 5 marks.

ASSIGNMENTS
PART A
1. What is strategic marketing? What are its distinguishing characteristics? Specify the corporate inputs needed to formulate marketing strategy. 2. Majority of marketing strategists acknowledge the importance of competitive analysist but less efforts are put into detailed and formal analysis of competitors, Why? Please explain. 3. What are the factors on which Porters choice of strategy is based? Explain in detail the three generic strategies identified by Porter. 4. How to assess the competitors strengths and weaknesses? Is this information necessary and for what purpose? 5. To prepare an effective marketing strategy, a company must study its competitors as well as its actual and potential customer. Discuss.

PART B
1. A firm needs a competitive intelligence system to keep track of various facets of its rivals businesses. Discuss 2. What is bench-marking? Explain with the help of examples how bench-marking can help improving competitive performance. 3. Describe BCGs strategic environment matrix. What is sustainable competitive advantage? What are the eight most significant potential competitive advantages a firm can have according to Davidson? 4. What is the boiled frog syndrome? What is PEST analysis? What are the strategic implications of different types of environmental conditions, defined in terms of dynamism and complexity? 5. (a) Distinguish between a customer-centered company and market-centered company. (b) What do you understand by competitor myopia? Explain with an example.

PART C
1. What is a strategic group? Is competition less intense within a strategic group and there is no rivalry among groups? While identifying strategic groups within industry, what dimensions company needs to look at? Discuss. 2. Gives the increasing power of retailers in consumer goods marketing, how has this affected producers brand strategy?

3. Discuss briefly the strategies used by market leaders, challengers, followers and nichers in the personal computer market. 4. Why is niching profitable? Discuss the characteristics of an idle niche. Why most of the firms entering a market choose a niching strategy? 5. Do you view Vision and Mission as distinct guidelines for strategic planning? If so, discuss the subtle differences with examples.

PART D
1. Describe Ansoffs growth vector matrix. What are its strategic implications? What are the levels of risk associated with each of the strategic alternatives identified in the matrix? 2. A challenger rarely improve its market share by relying on only one strategy. Its success depends on combining several principles to improve its position over time. Discuss. What are the attack strategies available to market challenger. 3. How can the market leader protect its position? Discus various defence strategies which he can choose in different circumstances. 4. Maruti Udyog being a market leader in automobiles has to defend its position in the market. Identify the approaches being used to the defence of its position. How successful does the strategy appears to be? 5. A business organisation cannot remain in business with out being socially relevant and responsible, and thus making investments in these areas is essential for its own existence if there is no element of social service in it? Please discuss and comment upon above mentioned statement? What is societal marketing?

SHORT ANSWER QUESTIONS


1. What do you understand by the term strategy? 2. Define strategic marketing? 3. Explain what is meant by Product Leadership. 4. Identify different sources of competition. 5. What do you understand by the term industry? 6. Explain the meaning of environmental scanning. 7. What is meant by Balanced Portfolio? 8. What are the dimensions of market analysis? 9. What is Concentrated Marketing? 10. Define what is an SBU? 11. What is a Turnaround Strategy? 12. What do you understand by Competitor-centered Company? 13. What is Reengineering? 14. What is counter Offensive Defence Strategy? 15. What is Flank Attack Strategy? 16. What are the characteristics of a Market Leader? 17. Why and when Guerrilla Attack? 18. What is Offensive Marketing? 19. What is meant by Productivity through people? 20. What is meant by market driven company?

CASE STUDY-1
RITZ CARLTON THE BEST IN SERVICE QUALITY

hen introducing himself to new employees, the president of the Ritz-Carlton Hotel Company says My name is Horst Schulze. Im the president, Im a very important person around here. After a few seconds he continues, But so are you. In fact, you are more important to customers than I am. If you dont show up, we are in trouble. If I dont show up, hardly anyone would notice. These comments reflect Mr. Schulzes attitude that employees are the crucial component in quality service. Therefore, the Ritz-Carlton very carefully selects only those applicants with an appropriate caring attitude. For every new employee at an introductory orientation session, ten others applied, and employees are told that they were not hired, they were selected. Once selected, each employee learns the Ritz-Carlton corporate culture in a two-day orientation, followed by extensive on-the-job training that results in job certification. Each employee learns the Ritz-Carlton Gold Standards, which include a credo, 20 basics of service, and the three steps of service. The steps include: (1) a warm and sincere greetings; (2) anticipation and compliance with guest needs; and (3) a fond farewell, using the guests name if possible. Employees may even have to modify their language. They should say Good morning, not Hi, hows it going? when asked to do something, they should respond Certainly, or My pleasure. In addition, all employees should learn the 20 RitzCarlton basics of quality service , which range from knowledge of ones work area and the Ritz-Carlton Credo to answering the telephone with a smile and wearing immaculate uniforms. At the Ritz-Carlton employees are not servants, they are ladies and gentlemen serving ladies and gentlemen. To back up all this training, employees are empowered to handle any customer complaint on the spot and can spend up to $2,000 doing so. And they can demand the immediate assistance of other employees. Twenty minutes later, they should telephone the guest to make sure that the complaint was handled properly. In addition, once employees learn of particular customer wants, such as foam pillows or a desire for a particular newspaper, that information goes into a 240,000 person database so that the customer will automatically get the desired service the next time he or she stays at a Ritz-Carlton. This attention to qualify is not confined to hotel staff. Mr. Schulze and the other senior executives meet weekly to review measures of product and service quality, guest satisfaction, market growth and development, and other business indicators. From top management down, Ritz-Carltons approach to quality management is characterized by detailed planning. Quality teams at all levels set objectives and devise action plans, and each hotel has a quality leader and work area teams responsible for problem solving, strategic planning and setting quality-certification standards for each position. Each hotel aims to create a two-to-one ratio of internal to external complaints. Internal complaints are made by employees who spot problems in service delivery. By eliminating internal problems, RitzCarlton removes the

causes of external complaints by customers. Management thinks that solving problems before they arise is cost-effective. Once problem has occurred, there are additional costs of employee time to fix the problem plus hotel remedies such as complimentary cocktails and a follow-up letter, not to mention the possible cost of losing a customer. Patrick Mene, vice President of quality, expresses this as the 1-10-100 rule: What costs a dollar to fix today will cost $10 to fix tomorrow and $100 to fix downstream. To ensure that quality standards are maintained, Rit-Carlton collects daily reports from each of the 720 work areas in each of the 30 hotels it manages. The company tracks measures such as annual guestroom preventive-maintenance cycles, percentage of check-ins with no queuing, time spent to achieve industry-best clean-room appearance, and time to service an occupied room. Not surprisingly, Ritz-Carlton won the prestigious Malcolm Baldrige National Quality Award in 1992. this moved the firm into very select company only one service firm had ever won this award. You might think RitzCarlton would be satisfied with a customer satisfaction rating of 97 percent, one of the lowest employee turnover rates in the hotel industry (30 percent). But not Ritz-Carlton! Mr. Schulze has set new quality performance standards to be reached by 1996: a 100-percent customer satisfaction rating and a reduction of defects to just four for every million customer encounters. Eliminating virtually all problems, however, is a costly process that can reduce company profit, and some critics believe that Ritz-Carlton is not sensitive enough to its bottom line. For example, to improve customer satisfaction 97 percent to 98 percent, some would say, is a marginal improvement that could require a great deal of employee effort and expense for a low dollar return. Besides, how can any firm anticipate all possible problems in order to eliminate complaints? Should it even desire to do so? Questions 1. Why is it important for Ritz-Carlton to insist that employees not think of themselves as servants, but rather as ladies and gentlemen? 2. In what ways does Ritz-Carlton engage in relationship marketing? 3. Is quality at Ritz-Carlton cost-effective? Even if it costs $2,000 an incident? 4. Should Ritz-Carlton attempt to move towards Mr. Schulzes latest goals? Why or why not?

CASE STUDY-2
SNEAKER WARS neakers have become a national obsession. Everyone seems to have them and everyone likes them from the sports enthusiast and the health conscious to the junior executive, the fashion conscious, and the active home-maker. Indeed, according to one analyst, one-third of all shoes sold in the United States today are sneakers. Two giants dominate the athletic shoe industry : Nike from Oregon and Reebok from Boston control approximately 50 percent of the sneaker business. Nikes success was based on creating a performance shoe

for the fitness boom, specifically for the jogging craze of the 1970s, while Reebok made it on the new relaxed life-style of the 1980s, recognizing that 80 percent of all sneakers sold are for leisure use. Now both companies make hundreds of styles for both performance and recreational use. Today in the battle to the number one, it has become Nike substance versus Reebok style. In the mid1980s, by focusing on a special shoe for women, Reebok roared past Nike, unseating them from the position atop the athletic shoe industry. It was the aerobic shoe that propelled Reebok to number one. Although the wrinkled leather was originally a production mistake, management loved it and so did the customer. Paul Fireman, Reeboks CEO and founder of Reebok in the United States, was a salesman who once ran a small family sporting goods business. Because of the success of Reebok, he has become one of the highestpaid executives in the nation. Even he is surprised by the success of the business. But Fireman concedes that it is consumers who have made his company number one. Therefore, Reebok will continue to focus its efforts on satisfying the customer. A recent example of the customer orientation is the introduction of hand painted sneakers for the masses. Nike was founded by Phil Knight, a runner from the University of Oregon. Knight and his former track coach, Bill Baumann, started the company and rode the running boom to instant success. Knight is the driving force, and remains immensely competitive. While Nike has made concessions to fashion, it is technology the company is counting on to win the war against Reebok. A recent innovation is the Air Revolution, a plastic airbag in the heel of the shoe that is the visible. Reebok has developed its own system, called Energy Return, which involves the placement of plastic tubes in the shoes. It may ultimately include a window so that the tubes would be visible. Both companies spend enormous amounts on advertising and endorsements. Nike has long favoured prominent athletes like Salazar, McEnroe and Jordan as spokespersons. Their strategy seems to be paying off. Their advertising campaign with the slogan Just do it, coupled with the success of their Air Pocket shoes such as the air Jordan has allowed Nike to move past Reebok and recapture the number-one position in the industry. But Reebok is expected to rebound from its recent slump, which some analysis say was brought on by its avantgrade Reebok Let UBU promotional campaign. This $25 million campaign with fairy godmothers, three-legged men, tub-playing swimmers, and bobby-soxed twins was seen as two weird, and it failed to enhance sales. The competition never ceases. An upstart company called L.A. Gear sneers at research, development, and technology simply letting people wear their sneakers and then listen to what is said about them. L.A. Gear

came from nowhere in 1987 to capture an 11 percent share of the market and $600 million in sales by 1990. The industry is cyclical. Todays leaders could easily go the way of Keds, Converse, and Adidas popular in the 1970s, 1960s, and 1970s, respectively, and still on the market, but nowhere near number one today. Questions 1. Explain how Reebok has been both a market leader and a market challenger. 2. Explain why Nike should properly be classified as a market-centered company. 3. Discuss market-expansion strategies that Nike either has used or could use to enhance its market position.