Hw due on friday november 1st at 8 PM

Hint

Case #37: Propose 2 solutions for what Nicole should do in this situation.  You can choose to address the 2 options given in the scenario (lie or mutilate the shirts), or come up with other creative solutions...

Here's one example on the topic of mutilating samples from Nordstrom: http://www.nordstromsupplier.com/NPG/PDFs/U.S. Customs Compliance/Apparel/Apparel & Fabric Sample Import Requirements UPDATED.pdf

Case 37 THE SAUDI ARABIAN SAMPLE SITUATION

Lorynn Divita, Baylor University

Nicole St. Lawrence is a merchandising assistant at Racer Jeans, a division of Chapman Jeanswear, one of the world's largest jean manufacturers, headquartered in St. Louis, Missouri. Nicole's job is to work with all of Racer's licensees. Racer Jeans only manufactures jeans, but it recognizes the importance of marketing itself as a lifestyle brand with a wide array of products, such as knit and woven shirts, socks, accessories, and leather products, each branded under the Racer name. Rather than become the manufacturer of these products, Racer has chosen to stick with what it does best—making jeans—and license the use of its name to manufacturers of these other products. Of the 15 licensees with which Racer has agreements, its main licensees include Hill Hosiery sock manufacturers in North Carolina, Ranchero Leather Products belt and leather goods manufacturers in Arizona, Habbott Brothers knit shirt manufacturers in New York, and its largest licensee, Sammy Shirts, a woven shirt manufacturer also in New York City.

Racer allows each company to develop a line that it markets under the Racer name, in exchange for payment of five percent of all sales from the line to Racer. Racer provides each licensee with co-marketing dollars and support materials, such as computer files containing the artwork for the most recent product labels and hangtags that licensees then adapt to their own merchandise.

It can be difficult for Nicole St. Lawrence to stay on top of what all 15 licensees are doing at all times, particularly because of how geographically dispersed they all are. Sometimes problems occur and relationships between Racer and one of its licensees get strained. For example, one time when Nicole requested product samples from each licensee to feature in a display, she realized that Sharp, the Racer's jacket licensee, was using outdated hangtag art and the colors on the logo on the hangtag were not the approved “Racer Red” that was specified. When she called the company to tell it that it had to reprint new hangtags, it had to discard more than 3,000 hangtags and was not pleased. But Nicole understood it was her job to preserve the integrity and continuity of the Racer brand, even if it made some of the licensees mad.

Nicole was busy getting product ready for a big meeting with Smithson, its largest retailer in Canada, with company headquarters in Toronto. Smithson requested a replica of a floor set in its offices for the meeting, complete with actual store fixtures filled with Racer product to see how the merchandise will look on the store floor. Providing jeans for the floor set has been no problem, but Nicole has had to coordinate merchandise from all 15 of the licensees. Finally, with just three days to spare, Sammy shirts delivers its products to Nicole, giving her just enough time to ship the product with the rest of the licensees’ merchandise to Toronto. Just before contacting Racer's shipping department to show them the order, she realizes something that could disrupt the entire shipment: Sammy sent them an entire shipment of sample shirts manufactured in Saudi Arabia, and Canada has an embargo on clothing from Saudi Arabia and won't permit it to enter the country. The production shirts, however, will not be produced in Saudi Arabia. After many telephone calls to government offices, Nicole finds out that the shirts can enter the country as long as they are mutilated so that it is obvious they are only samples and can never be sold. The recommended way to do this is to cut a swatch of fabric out of the back of the shirt, so that they look fine on the rack but obviously can't be worn by anyone. This brings a whole new set of problems for Nicole. Sammy has sent a few thousand dollars worth of shirts at retail for the show with the expectation that they will be returned to them for future sales. They do not want their shirts mutilated because they will not be able to recoup any of their money. Smithson is equally adamant that if Racer expects to get any shirt orders, they need to see how the sample merchandise looks in a store environment. Sammy has put a great deal of pressure on Nicole to just lie about the country of origin on the shipping label, saying that “There's no way anyone's going to check it.” Nicole isn't sure how to handle the situation, but she knows she needs to make a decision quickly.

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