Ethics discussion: Payroll

An employer bears a special responsibility to account properly for the company’s payroll. A primary object of that responsibility is the government’s (federal, state, and local) “connection” to taxes levied on each employee’s income, as well as other taxes levied on the employer’s payroll.

Connor Lang was discussing summer employment with Jarrod McIntyre, president of Azalea Landscaping Service:
Jarrod: I'm glad that you're thinking about joining us for the summer. We could certainly use the help.Connor: Sounds good. I enjoy outdoor work, and I could use the money to help with next year's school expenses.Jarrod: I've got a plan that can help you out on that. As you know, I'll pay you $12 per hour, but in addition, I'd like to pay you with cash. Since you're only working for the summer, it really doesn't make sense for me to go to the trouble of formally putting you on our payroll system. In face, I do some jobs for my clients on a strictly cash basis, so it would be easy to just pay you that way.Connor: Well, that's a bit unusual, but I guess money is money.Jarrod: Yeah, not only that, it's tax-free!Connor: What do you mean?Jarrod: Didn't you know? Any money that you receive in cash is not reported to the IRS on a W-2 form; therefore, the IRS doesn't know about the income-hence, it's the same as tax-free earnings.
Why does Jarrod McIntyre want to conduct business transactions using cash (not check or credit card)?
How should Connor respond to Jarrod's suggestion?

http://kucourses.com/ec/crs/default.learn?CourseID=3073466&Survey=1&47=4849309&ClientNodeID=404340&coursenav=2&bhcp=1

My Response: Jill Stidd 19 Sep 08 12:01 PM MST

Per out text and the IRS website, it states clearly that an employer is responsible for submitting FICA taxes, social security taxes, workers comp that have been calculated and withheld from the employee’s gross pay. The other segment of payroll taxes is state taxes which are explained here on the Employment Development Department (EDD) website, “California has four State payroll taxes which are administered by the Employment Development Department (EDD). They are Unemployment Insurance (UI) and Employment Training Tax (ETT), which are employer contributions, and State Disability Insurance (SDI) and Personal Income Tax (PIT), which are withheld from employees' wages.Wages are generally subject to all four payroll taxes. However, some types of employment are not subject to payroll taxes and/or PIT withholding. For more information, please refer to the California Employer's Guide (DE 44).” (http://wwwedd.cahwnet.gov/Payroll_Taxes/What_Are_State_Payroll_Taxes.htm)

The employer is required to meet the amount of FICA taxes that the employee pays. This can be a very large cost to the employer and must be budgeted into operating costs of the business. The penalties and interest are quite large for late FDT payments. This is all very expensive and time consuming for an employer and that is the reason that Jarrod is suggesting this arrangement. By using Cash for payment, there is no paper trail or accounting of the payment there for a way he thinks he can hide the payment to Conner. However what he is not telling Conner is that Conner will still be responsible for his portion of FICA coming out of his paycheck at the end of the year if this company should ever be audited by the Employment Development Department in the state of California and caught for these actions. Which could result in a much lower tax return for Conner than he expected. Connor could learn the very hard lesson that he should have said no to Jerrod.Here is some good advice from the IRS, “How Can I Avoid Receiving FTD Penalties? You will be subject to a FTD penalty. The penalty rate increases according to the number of days the tax liability remains unpaid.If you make a deposit; late (after the deposit due date), or; of an incorrect amount (less than 100% or theapplicable safe harbor amount), or; in an incorrect manner (to an unauthorizedfinancial institution, directly to the IRS, or notthrough an electronic funds transfer, if required.”

(http://www.irs.gov/pub/irs-pdf/p1932.pdf)Warren, Reeve, and Duchac.( 2007). Accounting 11. Thompson South – Western.http://wwwedd.cahwnet.gov/Payroll_Taxes/Reporting_Requirements.htm retrieved September 19,2008.http://wwwedd.cahwnet.gov/Payroll_Taxes/What_Are_State_Payroll_Taxes.htm retrieved September 19,2008.

Web research: Corporations

Go to the website of About.com and find information about patents and copyrights at http://www.usgovinfo.about.com/blpatents.htm. Read Part 1 on the first page, which contains general information about patents, and then click on one or more of the links to information about applying for a patent. Go back to the first page, click on Part 2, and read about copyrights. Click on one or more of the links about registering a copyright.
Discussion Question
Please respond to this Discussion Question using the information from the Web Field Trip above. Take time to review the responses of your classmates and provide your feedback.
In your Web Field Trip, you were asked to research the procedures for applying for a patent and registering a copyright. What are those procedures? Are these procedures available to anyone who wants to apply for a patent or register a copyright, or are there limitations?

My Response: Jill Stidd 12 Sep 08 12:14 PM MST

Patent: who can apply?“According to the law, only the inventor may apply for a patent, with certain exceptions. If a person who is not the inventor should apply for a patent, the patent, if it were obtained, would be invalid. The person applying in such a case who falsely states that he/she is the inventor would also be subject to criminal penalties. If the inventor is dead, the application may be made by legal representatives, that is, the administrator or executor of the estate. If the inventor is insane, the application for patent may be made by a guardian. If an inventor refuses to apply for a patent or cannot be found, a joint inventor or a person having a proprietary interest in the invention may apply on behalf of the non-signing inventor. If two or more persons make an invention jointly, they apply for a patent as joint inventors. A person who makes a financial contribution is not a joint inventor and cannot be joined in the application as an inventor. It is possible to correct an innocent mistake in erroneously omitting an inventor or in erroneously naming a person as an inventor.”

http://usgovinfo.about.com/gi/dynamic/offsite.htm?site=http://www.uspto.gov/web/offices/pac/doc/general/apply.htm)

Patent: who can not apply?“Officers and employees of the Patent and Trademark Office are prohibited by law from applying for a patent or acquiring, directly or indirectly, except by inheritance or bequest, any patent or any right or interest in any patent.” (http://usgovinfo.about.com/gi/dynamic/offsite.htm?site=http://www.uspto.gov/web/offices/pac/doc/general/apply.htm)Patent:

how to apply?They recommend using the electronic filing system due to its ease. All you do is turn what you are tryping to patent into a PDF and send it through there secure system along with the application and fees. “Use EFS-Web, the USPTO's electronic filing system for patent applications.” (http://usgovinfo.about.com/gi/dynamic/offsite.htm?site=http://www.uspto.gov/main/patents.htm)Patent: feesAlternative fee amount (non-small entity) basic filing fee 850.00 and for Alternative fee amount (small entity) basic filing fee 425.00 ( http://usgovinfo.about.com/gi/dynamic/offsite.htm?site=http://www.uspto.gov/go/fees/index.html p 2)

Patent financial data:Fiscal year 2007 small entity payments $41,519 and for non small entity $ 209,577 quite a bit of revenue here for patent applications. (http://usgovinfo.about.com/gi/dynamic/offsite.htm?site=http://www.uspto.gov/go/fees/index.html. p4,5)

Copyrights: who may apply?Persons or organizations creating "original works of authorship" including literary, dramatic, musical, architectural, cartographic, choreographic, pantomimic, pictorial, graphic, sculptural, and audiovisual displays usually register copyrights. Authors, artists, song writers and creators of computer programs typically register copyrights.Several categories of material are generally not eligible for federal copyright protection.


These include among others:• Works that have not been fixed in a tangible form of expression (for example, choreographic works that have not been notated or recorded, or improvisational speeches or performances that have not been written or recorded)• Titles, names, short phrases, and slogans; familiar symbols or designs; mere variations of typographic ornamentation, lettering, or coloring; mere listings of ingredients or contents• Ideas, procedures, methods, systems, processes, concepts, principles, discoveries, or devices, as distinguished from a description, explanation, or illustration•

Works consisting entirely of information that is common property and containing no original authorship (for example: standard calendars, height and weight charts, tape measures and rulers, and lists or tables taken from public documents or other common sources)http://usgovinfo.about.com/blcopyrights.htm

There is no need to "apply" for a copyright. A copyright is automatically considered to be granted to the author or creator of the work as soon as it is finished and considered "fixed" in a copy or recording. [Details from the US Copyright Office] While there is no need to apply for copyrights, there are definite advantages to registering them through the Copyright Office. Primarily, registering a copyright establishes a legally enforceable public record of the creator's copyright claim.Things that cannot be copyrighted include any inventions, ideas, procedures, processes, slogans, principles, or discoveries. (http://usgovinfo.about.com/blcopyrights.htm)

Copyright: who may not apply?In the case of works made for hire, the employer and not the employee is considered to be the author. Section 101 of the copyright law defines a “work made for hire” as:1. work prepared by an employee within the scope of his or her employment; or2. work specially ordered or commissioned for use as; a contribution to a collective work; a part of a motion picture or other audiovisual work&; a translation &; a supplementary work; a compilation; an instructional text; a test; answer material for a test an atlas.(http://usgovinfo.about.com/blcopyrights.htm)

Copyright: how to registerTo register a work, send the following three elements in the same envelope or package to:Library of CongressCopyright Office101 Independence Avenue, SEWashington, DC 20559-60001. A properly completed application form.2. A nonrefundable filing fee* for each application.3. A nonreturnable deposit of the work being registered. The deposit requirements vary in particular situations. The general requirements follow. Also note the information under “Special Deposit Requirements.”
(http://usgovinfo.about.com/blcopyrights.htm)

I have written a children’s book that I have wanted to copyright for some time now. I had researched into this a while back and found out that one way to secure copyright of my book was to make a copy, seal it, and send it to myself, and never break the seal. I did that. I now may make the next step and register it now that I have all the information I need to do so. I want to publish it as well; I am looking right now for someone to illustrate it.http://usgovinfo.about.com/blpatents.htmhttp://usgovinfo.about.com/blcopyrights.htmDate Modified: 12 Sep 08 12:20 PM MST

Ethics discussion: Internal controls

Leah Corbin, CPA, is an assistant to the controller of Beartooth Consulting Co. In her spare time, Leah also prepares tax returns and performs general accounting services for clients. Frequently, Leah performs these services after her normal working hours, using Beartooth Consulting Co.’s computers and laser printers. Occasionally, Leah’s clients will call her at the office during regular working hours.

Discuss whether Leah is performing in a professional manner.

My Response: 12 Sep 08 11:10 AM MST

Initial Post: Jill Stidd

I feel that this is not a professional attitude as a CPA. I think that there are two points to consider here that are important for this discussion. First, our text defines capital and revenue expenditures, “once a fixed asset has been acquired and placed in service, expenditures may be incurred for ordinary maintenance and repairs. In addition, expenditures may be incurred for improving an asset or for extraordinary repairs that extend the assets useful life. Expenditures that benefit only the current period are called revenue expenditures. Expenditures that improve the asset or extend its useful life are called capital expenditures.” (Warren, Reeve, and Duchac. P. 9,10)

The discussion says that Leah frequently uses the computer and printer to work on private clients after hours. It does not say if she has permission to do this, if so then that is a different story all together. If she does not have permission then she is adding to the wear and tear of the equipment that could add to accumulated depreciation and affect the assets on the balance sheet for the company she works for. If she creates a situation that the printer goes through more ink (which by the way is very expensive, or needs a minor repair then that would affect expenses which would effect the income statement and net income for the company.Second idea to look at, should not Leah as a CPA create her own company that purchases her own equipment so that she can garner the tax benefits that the company she is working for gets with deprecation and expenses?

Not only is she not very ethical and professional here, she is not a very smart CPA if she is letting the company she works for get all the tax benefit that she could acquire if she created her own business.As far as the phone calls go at work, in most places of business the policy is stated in the handbook that there should be no personal phone calls, so again this is highly unprofessional.Warren, Reeve, and Duchac.( 2007). Accounting 11. Thompson South – Western.

Class Work by Jill Stidd

For this Web Field Trip you will review the annual reports of the Coca Cola Company and Wal-Mart, two of the largest publicly traded firms in America.
Coca Cola
Go to http://www.thecoca-colacompany.com/investors/annual_other_reports.html. This page shows a link to the 2006 annual report.You will need to scroll through the annual report to find the information that you need to answer the questions. Remember what you learned in Accounting I about financial statements to help you find what you need.
Wal-Mart
Go to http://investor.walmartstores.com/phoenix.zhtml?c=112761&p=irol-irhome. Find the financial information and then annual reports. You will need to scroll through the annual report to find the information that you need to answer the questions. Remember what you learned in Accounting I about financial statements to help you find what you need.
Discussion Question
Please respond to this Discussion Question using the information from the Web Field Trip above. Take time to review the responses of your classmates and provide your feedback.
Compare the accounts receivable turnover ratios for Coca-Cola and Wal-Mart. What characteristic(s) of these companies would indicate that these ratios are reasonable?

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My Response: 8 Sep 08 12:44 PM MST


Initial post: Jill Stidd

Coca-colaAccounts receivable turnover = (net sales) / (average accounts receivable)(24,088 ) / (2,587) +( 2,281) / 2 the AR net realizable values for both years INCLUDE the estimated write off.

To support this statement Coca Cola 2006 report states, “We record trade accounts receivable at net realizable value. This value includes an appropriate allowance for estimated uncollectible accounts to reflect any loss anticipated on the trade accounts receivable balances and charged to the provision for doubtful accounts. We calculate this allowance based on our history of write offs, level of past-due accounts based on the contractual terms of the receivables, and our relationships with and the economic status of our bottling partners and customers.” http://www.thecocacolacompany.com/investors/pdfs/form_10K_2006.pdf . p.76

9.90= (24,088 ) / 2434

Answer 9.90 Accounts receivable turnoverWal-Mart($312,427) / (2,662) +( 1,715) / 2($312,427) /4377 /2($312,427) / 2188,50

Answer 142.76 Accounts receivable turnover

I would say that Coca Cola is completely different customer base from Wal-Mart. The account receivables also come from different sales strategies. Coca-cola, in that it ultimately sells beverage retail products to a consumer; those revenues go to the seller not to Coca Cola. Coca Cola makes it sales as a wholesaler invoicing the seller given the terms stated by Coca Cola, which creates their accounts receivables. (I looked long and hard for and documentation on terms, but did not find any) Let’s assume that they are net 30 and given that there turnover was 9.90 this would justify those numbers and are in line for Coca-Cola.Wal-Mart sells directly to the consumer there for the sales revenue is from the consumer. There receivables are from a very different venue. As stated by the 2006 report from Wal-Mart, “Receivables Accounts: receivable consist primarily of receivables from insurance companies resulting from our pharmacy sales, receivables from suppliers for marketing or incentive programs, receivables from real estate transactions and receivables from property insurance claims. Additionally, amounts due from banks for customer credit card, debit card and EBT transactions that take in excess of seven days to process are classified as accounts receivable.” http://walmartstores.com/Media/Investors/2006_annual_report.pdf p.36

I am sure part of the High turnover or Wal-Mart has two factors. I would like to note that I was very surprised to see this high turnover rate of 142.76 at first, but when I looked more closely it made perfect sense. Give that we use the net sales for the computation, Wal-Mart’s net sales is much higher than Coca-Cola net sales, but both of their A/R values were similar, that would be one reason that Wal-Mart’s turnover rate would be higher. The second reason I would think is because there A/R consists of insurance billing. With the electronic infrastructure of the insurance billing today it happens very quickly once it is submitted to the insurance company. It is all electronic from the submittal, to the response, and finally to the money being directly deposited into Wal-Mart’s bank account. This would create a rapid turnover in A/R .In conclusion I would have to say that yes, both companies in all their differences as companies are reasonable in their ratios of turnovers.

http://www.thecocacolacompany.com/investors/pdfs/form_10K_2006.pdfhttp://walmartstores.com/Media/Investors/2006_annual_report.pdfWarren, Reeve, and Duchac.( 2007). Accounting 11. Thompson South – Western.

Ethics discussion: Bank Interest computation

Neka Kiser, vice president of operations for Mountain National Bank, has instructed the bank’s computer programmer to use a 365-day year to compute interest on depository accounts (payables). Neka also instructed the programmer to use a 360-day year to compute interest on loans (receivables).

Discuss whether Neka is behaving in a professional manner.

My Response: 5 Sep 08 10:09 AM MST

I wanted to provide a definition of a deposit account. I went to the web in search of this definition, “A deposit account is a current account at a banking institution that allows money to be deposited and withdrawn by the account holder, with the transactions and resulting balance being recorded on the bank's books. Some banks charge a fee for this service, while others may pay the customer interest on the funds deposited.

(http://en.wikipedia.org/wiki/Deposit_account, reveiwed, September 4, 2008)

To increase the days that the intrest is compute for the deposit account would increase the interest that the bank could collect from the consumer. This is not ethical and if customers looked at their bank statement and could analize this amount that must be disclosed then there would be complaints. This complaint would also be sent to the regulations that oversee the banking industry. The order that Neka gave the programer to compute the loans (receivables) for a 360 day year sends a clear message that Neka was aware of the correct thing to do and chose not to for the payables. Neka is acting in a very unprofessional manner and is asking someone else to create something in terms of computer programming that is unethical as well.The computations of the receivables is in order for computing at 360 days per our text. “ The interest rate on notes is normally stated in terms of a year, reagardlessof the actual period involved.”

(Warren, Reeve, and Duchac,. 2007)

http://en.wikipedia.org/wiki/Deposit_account reveiwed, September 4, 2008)Warren, Reeve, and Duchac.( 2007). Accounting 11. Thompson South – Western.

Paper: Nike Brand Marketing Mix Analysis written by Jill Stidd / Grade A

Nike Brand Marketing Mix Analysis Final Paper
MT219-19: Marketing
Jill Stidd
Kaplan University


Given the importance in marketing for the deeper understanding of the strategic planning process and formulating a strong marketing plan, this paper analyzes the marketing mix for the Nike brand as well as stimulate suggestions and ideas for any areas of their existing marking objectives that change would create a better marketing plan.

I choose Nike brand because of my previous experience with the shoe sales industry and the fact that Nike’s headquarters and cooperate offices are local to where I live in Portland, Oregon. This history of Nike is that before Swoosh and before Nike there were to visionary men, Bill Bowerman and Phil Knight. These two men believed in their vision and invested $500 dollars each which created Blue Ribbon Sports Company. They placed their first order of 300 shoes in January of 1964. Bill sold the shoes out of his car, while Phil tore apart athletic shoes to see how he could make them better. He used one of the very important marketing tools of “trial” having anyone he knew to wear the shoes and give him feedback, hence became the start of customer loyalty and the foundation of Nike shoes. Nike is a major manufacturer of athletic shoes, apparel, and sports equipment there current portfolio is stated on their website, “Nike’s subsidiaries have a significant place in Nike's plan to grow to $23 billion in revenue by 2011. We estimate that 25 percent of the company’s targeted revenue growth in the next four years will be generated by these brands which currently represent revenues of more than $2 billion. Collectively over the past five years, these subsidiaries have nearly tripled revenue and increased their pretax income contribution more than fivefold. As part of our growth strategies, Nike continues to optimize its portfolio, ensuring that the company is investing in opportunities that will generate the highest returns. Nike’s Brand Portfolio currently includes four wholly owned subsidiaries: Converse Inc., NIKE Golf, Cole Haan Holdings, Inc., and Hurley International LLC.
(http://www.nikebiz.com/company_overview/subsidiaries/index.html, reviewed August 3, 2008.)

Nike’s width is action sports, basketball, cycling, eyewear, football, golf, running, soccer, skateboarding, swimming, tennis, women’s and men’s shoes, women’s and men’s athletic clothing, equipment. Nikes Depth in women’s running shoes is for example: Nike Shox Turbo VI+, Nike Air Max 360 III, Nike Shox Navina+, are but a few examples of their depth. Given the research that I have done it seems that the top competitive athletic shoes manufacturers today are New Balance and Reebok, they are all looking at one another to create their change and improvements. Currently Nike’s Position is #1, New balance is #2, and Reebok is #3, these statistics were stated on the New Balance video that we were to watch for a video project.

Given that Nike brand is a heterogeneous market great thought and attention to detail in regards to the target market and segmentation is vitally important to the success of Nike’s marketing plan. Nike’s marketing team without a doubt had to consider all five conditions before starting the task of market segmentation. Nike uses a differentiated strategy for market segmentation. It is clear that they had to use age, gender, race and ethnicity, income, and psychographic variables, such as personality characteristic, motives, and lifestyles to understand their target market in the wide range of athletic shoes they provide in both price and shoe quality, an example is that the “walker” does not need the same shoe as the “marathon runner” or a elderly person is not looking for the newest edgy design patterns as the teenager might be looking for. There is certainly a “status quo” with Nike branding with the promotional celebrities like Michael Jordan, his presence also brings the necessity for race and ethnic segmentation.

Nike brand marketing mix has been well planed in their definition of what they sell as a product via the website and other venues, options for price for the buyer as seen on their on-line store, their placement and distribution has been clearly outlined, and there promotion is state of the art. Because Nike’s product is a major manufacturer of athletic shoes, apparel, and sports equipment the product that they sell is a tangible good that would be classified as a consumer product because the products that Nike offers would be purchased to satisfy personal needs. I would like to note that I feel Nike has the potential to cross over into classifications as a consumer product.

For the average shoe buyer it would be considered a shopping product, but for the avid athlete, marathon runner, or Olympic competitor I think Nike would move into the specialty product. The features and benefits of Nike footwear is that they are a technologically advanced athletic shoe is design, comfort, support that certainly benefits every consumer looking for a shoe that meets their needs. Nike’s basic positioning is as an athletic shoe, apparel, and equipment that has been scientifically designed for athletics as well as those interested in the Nike brand. They support this positioning claim with various areas that are outlined on their website, here is one excerpt, “Today, Nike continues to seek new and innovative ways to develop superior athletic products, and creative methods to communicate directly with our consumers. Nike Free, Nike+ and Nike Sphere are just three examples of this approach.” http://www.nikebiz.com/company_overview/history/2000s.html , reviewed July 14, 2008.


I feel that Nike has researched extensively the basis for pricing their products, be it footwear, apparel, or various equipment offerings. It is obvious that ranked #1 they evaluate cost, demand and competition in setting the price structures. Nike’s price variable is that they have various price points from low to high for each of its categories that if offers. Mark up pricing is the pricing approach that Nike suggests to the retailers that sell Nike products. I think given the industry there is some demand pricing do to the fact of the popularity of some footwear that they designed that have a celebrities name attached as well as some competition based pricing happening with the mid range footwear that they sell. When they release a new product they must consider new product pricing. Given that Nike would be a company that has a goal to maximize profits for an entire product line rather than focusing on just an individual product the implement product-line pricing. It is my experience in the retail setting to see Nike using reference pricing in terms of setting a higher priced shoe of greater quality next to a lower priced “leader” shoe. As displayed in their on-line store they do implement odd and even pricing. They are aware that they use even pricing for their most expensive and top of the line footwear. (http://www.nike.com/index.jhtml?sitesrc=USLP#l=nikestore,grid,_grid,f-10001+12001/so-finalPrice0&re=US&co=US&la=EN , reviewed August 3 2008)

Reduced priced footwear as an odd price point for the appearance that this shoe is a bargain therefore it will be purchased. I also saw evidence in their online store of special event pricing, for example currently “back to school” discounts. I would have to say given my research in our text book and the online I would say that Nike product is a selective distribution. This article I found on the web describes my product category and supports selective distribution. “Selective Distribution Between exclusive and intensive distribution, there is selective distribution. Selective distribution is the strategy in which several but not all retail outlets in a given area distribute a product. Shopping goods are goods that consumers seek on the basis of the most attractive price or quality characteristics are frequently distributed through selective distribution. Because of this, competition among retailers is far greater for shopping goods than for convenience goods. Naturally, retailers wish to reduce competition as much as possible. This causes them to pressure manufacturers to reduce the number of retail outlets in their area distributing a given product in order to reduce competition. The number of retailers under a selective distribution strategy should be limited by criteria that allow the manufacturer to choose only those retailers who will make a contribution to the firm’s overall distribution objectives.” (http://www.web-articles.info/e/a/title/Exclusive-Distribution-and-Intensive-Distribution/, reviewed July 27, 2008.)

In terms of Physical distribution, Nike corporation states that Nike has added 700 manufacturing facilities. “Nike is committed to supply chain transparency by updating publish disclosure of the more than 700 contract factories worldwide producing Nike branded product. Disclosing our factory base encourages transparency and collaboration.

For Nike the Beijing Olympics provide an opportunity to share China's importance to our business. We have established aggressive business targets aimed at improving working conditions in contract factories, improving product through design, becoming climate neutral and investing in youth access to sport.” (http://www.nikeresponsibility.com/#workers-factories/beijing_factories , reviewed July 28, 2008). Nike is producing footwear, athletic wear, and uniforms for USA teams for the 08 Beijing Olympics as stated in the media on Nike’s Website, “EUGENE, Ore. (1 July, 2008) – Nike athletes, including Lauryn Williams, premiered Nike’s USA Track and Field (USATF) uniforms, which will be worn by members of the 2008 Olympic Team for Track & Field, before a sold-out crowd of 20,000 fans at the University of Oregon’s historic Hayward Field during the U.S. Track and Field Olympic Trials.” (http://www.nikebiz.com/media/pr/2008/07/01_USATF.html , reviewed July 28, 2008)
I feel that Nike has a great team that is planning an efficient physical distribution system that will insure decreased costs and increase in customer satisfaction. They have a very simply channel system, producer, retailer, and consumer, they seem to want full control of every operation. This production addition could potentially have great ramifications for the company if they are not fully stocked and ready for increased demand; however this company from all reports seems ready and eager for these goals to be met. This company is very aware of the cycle time of delivery as has researched all the venues for getting their product out to the consumer. They are even implementing some “on-line only” purchases of certain brands some of them the newest and with the most demand, understanding distribution for on-line sales would be extremely important customer satisfaction. Many of these customers would be “I want it now” customer.

Finally is analyzing Promotional techniques used by Nike I was impressed time and time again. Nike is a “new” company today than it was a few years back. Nike as a company was hit hard from a marketing perspective for attention to “toxic factories and the working conditions of their employees there” They have a great hurdle to unravel this debilitating review of their cooperate ethics, however in the financial report and a letter by the CEO of Nike, they are committed to a new paradigm with Nike, “This report covers a crucial period, and not just for Nike. Specifically, we saw heightened attention worldwide on corporate responsibility and the key challenges of climate change, poverty and equity. Simultaneously, we began to transform our vision of Nike’s role in contributing to positive change in communities around the world.
The opportunity is greater than ever for corporate responsibility principles and practices to deliver business returns and become a driver of growth, to build deeper consumer and community connections, and to create positive social and environmental impact in the world. We have made tremendous progress over the past two years in more deeply integrating corporate responsibility into our business model. We see corporate responsibility as a catalyst for growth and innovation, an integral part of how we can use the power of our brand, the energy and passion of our people, and the scale of our business to create meaning full change.”
(http://phx.corporate-ir.net/phoenix.zhtml?c=100529&p=irol-reportsAnnual ,reviewed August 3, 2008)

They use extensive advertising strategies on their website. Their idea to actually have an on-line personal trainer is yet another way to bring consumers to the website and visit and revisit thus promoting customer loyalty. “Jay Johnson currently serves as the Middle Distance Coach for the University of Colorado, his alma mater, where he has coached for more than five years. In addition to his coaching responsibilities, Coach Jay directs the Boulder Running Camp, one of the premier high school running camps in the country, and develops training materials for athletes and coaches of all ages and levels. Each week, Jay will be answering the best training questions we receive from you! If you have a question you want answered, email CoachJay@nike.com”. (http://insidenikerunning.nike.com/2008/07/09/july-9-2008/ reviewed August 1, 2008) , reviewed August 3, 2008) Nike’s decision to use athletes that can be great inspiration for others to start a training program and buy athletic shoes is a brilliant marking concept. Other Athletes they promote and sponsor and in turn promote Nike are: Asafa Powell, Shannon Rowbury, Shalane Flanagan, Bernard “Kip” Lagat, Kara Goucher.(http://insidenikerunning.nike.com/category/athletes/.com , reviewed August 1, 2008)

Other unique marketing promotion idea as well as brilliant integrated marking communications is there collaboration with Apple. An example, Nike + is an individualized site on NIKE.com that you can start your own monitored workout routine. Nike is smart to use the return to site basically every time you work out to record your results, using this device that they sell that you can put in a shoe that they sell! Nike+ teamed up with Apple and the iPod. “Welcome to Nike + iPod-Nike + iPod is your personal workout assistant. Music for every mile Supercharge your workout by creating high-intensity play lists. Check out what’s on your favorite athlete’s iPod.” (http://nikeplus.nike.com/nikeplus/v1/pdf/English.pdf) “Nike said yesterday that second-quarter profit rose 8.1 percent, helped by its iPod-compatible Nike+ line of running shoes. “Nike+ is turning out to be huge,” Nike CEO Mark Parker said in an earnings conference call. “In less than six months, Nike+ users have logged more than 3 million miles and there are over 3 million Plus-ready shoes in the global marketplace; we expect that number to double by the year end. Clearly our confidence in this concept has proven to be accurate.” Later in the call, Parker said, “Nike+ continues to be extraordinary, and we see that just accelerating as we add more styles to Nike+ over this next six to 12 months.” (http://www.ilounge.com/index.php/news/comments/nike-profit-boosted-by-nikeipod-sales/, reviewed August 1, 2008)

I did see coupons and cents off offers on other websites that were selling Nike shoes, however not the Nike website. I did not see any refunds or rebates with Nike shoes, I did not see a frequent user incentive, I know that Nike invests heavily in there brand and logo, their point of purchase materials, in terms of counter cards, display modules, signage, window displays and racks are always recognizable where you see NIKE shoes. I did not see any evidence of free samples, however I do know that they promote several different programs where they give away shoes to young children in “lets Play” program and others like it, if this would be considered free samples then yes, they use this promotion. I would say that Nike uses Consumer Games and contests heavily in there promotion with Nike 10K and Marathon’s, I think you could also add NIKE + personalized training program with this as well.

I am not sure exactly if Nike uses Trade promotions methods, however as I have stated prior, my father owns a european footwear store, and I do know that the shoe manufacturers use many of the trade promotions such as trade allowances (New balance does as stated in one of the video cases we heard) so I am sure Nike follows suite. Buy back allowances are used, scan back allowances are used, merchandise allowances are used , cooperative advertising is used when you place an add with there logo on it they will pay a portion of the add, free merchandise and dealer loader is used, premium money is used, as well as sales contests. I saw all these methods used over and over in the shoe sales industry.
I really feel that Nike current marketing mix is fully embracing there brand position. As I pointed out earlier in this report, Nike in the past had some trouble with this and is currently putting every resource and effort into being the “new” corporate business model. Their involvement in low income programs, as well as “let me play”, addressing child obesity that is rampant in our company, to “toxic-free factories” and shoe manufacturing are just a few of the areas that Nike is standing up to and evaluating in there segmentation. I have to say that I feel that Nike is on the cutting edge of marketing, there website proves it over and over. I feel there are no suggestions on my part in terms of product, pricing, distribution or promotion, as long as they continue this commitment to be a transparent in a information sharing corporation that is creating a green environment at every turn. That would have been my suggestion however they are 100% committed. They fulfilled their objectives of successful promotion by creating awareness of their product and commitment to the consumer, stimulating demand, identifying prospects having web users create their own accounts so there is personal information, retain loyal customers, and facilitate reseller support. When this is all a success the business is a success. Go Nike!




References:
http://www.nikebiz.com/company_overview/subsidiaries/index.html, reviewed August 3, 2008.
http://www.nikebiz.com/company_overview/history/2000s.html , reviewed July 14, 2008.
http://www.nike.com/index.jhtml?sitesrc=USLP#l=nikestore,grid,_grid,f-10001+12001/so- finalPrice0&re=US&co=US&la=EN , reviewed August 3 2008)
http://www.web-articles.info/e/a/title/Exclusive-Distribution-and-Intensive-Distribution/, reviewed July 27, 2008
http://www.nikeresponsibility.com/#workers-factories/beijing_factories , reviewed July 28, 2008
http://www.nikebiz.com/media/pr/2008/07/01_USATF.html , reviewed July 28, 200
http://phx.corporate-ir.net/phoenix.zhtml?c=100529&p=irol-reportsAnnual ,reviewed August 3, 2008
http://insidenikerunning.nike.com/2008/07/09/july-9-2008/ , reviewed August 3, 2008
http://nikeplus.nike.com/nikeplus/v1/pdf/English.pdf)
http://www.ilounge.com/index.php/news/comments/nike-profit-boosted-by-nikeipod-sales/, reviewed August 1, 2008)

Ethics discussion: Internal controls, Sarbanes-Oxley Act

Please respond to this discussion question using the information from this lesson.
The prompt for this week’s Ethics Lesson Discussion comes from the Special Activity SA 8-4 on page 389 of your text.

Pete Harsh and Sara Alper are both cash register clerks for Farmers' Markets. Gina Majed is the store manager for Farmers' Markets. The following is an excerpt of a conversation between Pete and Sara:

Pete: Sara, how long have you been working for Farmers' Markets?Sara: Almost five years this July. You just started two weeks ago ... right?Pete: Yes. Do you mind if I ask you a question? Sara: No, go ahead.Pete: What I want to know is, have they always had this rule that if your cash register is short at the end of the day, you have to make up the shortage out of your own pocket?Sara: Yes, as long as I've been working here.Pete: Well, it's the pits. Last week I had to pay in almost $50.Sara: It's not that big a deal. I just make sure that I'm not short at the end of the day.Pete: How do you do that?Sara: I just short-change a few customers early in the day. There are a few jerks that deserve it anyway. Most of the time, their attention is elsewhere and they don't think to check their change.Pete: What happens if you're over at the end of the day?Sara: Majed lets me keep it as long as it doesn't get to be too large. I've not been short in over a year. I usually clear about $50 to $80 extra per day.

Discuss this case from the viewpoint of proper controls and professional behavior.

http://kucourses.com/ec/crs/default.learn?CourseID=3073466&Survey=1&47=4849309&ClientNodeID=404340&coursenav=2&bhcp=1

My response: 28 Aug 08 2:07 PM MST


Farmers Markets as a company or business needs to review all its business practices whether they are a small business with one location or many locations. If these sorts of actions are going on by the employee’s as well as the managers then the company does not have internal control procedures in place and functioning. As stated in our text, the objectives of internal control are to provide reasonable assurance that (1) assets are safeguarded and used for business purposes, (2) business information is accurate, and (3) employees comply with laws and regulations. (Warren, Reeve, and Duchac. P. 350) As also emphasized in our text that a business’s control environment is in the attitude of the management and the employees understanding about the importance of internal control procedures.

This management was not upholding this importance to the employee by allowing the employee to “keep” the overage that the employee had at the end of the day. This is sending the message to the employee we allow fraud in this company “have at it!” The Human recourses department obviously did not translate the company personnel policies effectively. The management did not have a proper training with the employee, and the company is obviously not having “surprise” visits to ensure compliance.

One area this business needs to really address would be in the internal control procedures and that is hiring competent personnel that have the proper management training for the position. For proper control of cash receipts it is important that the manager and the employee count the ending shift cash drawer, it must balance with the opening shift cash drawer plus shift sales. It is not stated in this discussion if this process happens it just states that the manager encourages the employee to take what ever is “over.”

The accounting department should also see a red flag when there are only “cash short” and never any cash “over.” Seems there might be many area’s for fraud within this company in various departments! This would absolutely be for personal gain and it in fact fraud and theft and should be disciplined by what ever agencies would be involved.Warren, Reeve, and Duchac.( 2007). Accounting 11. Thompson South – Western.