Executives of The North Face, Inc., faced a troubling

Executives of The North Face, Inc., faced a troubling dilemma during the 1990s. For decades, those executives had struggled to develop and maintain an exclusive brand name for their company’s extensive line of outdoor apparel and sporting equipment products. By positioning those products for the ‘“high-end” segment of the retail market, North Face’s management had consciously chosen to ignore the much larger and more lucrative mainstream market. This decision kept the company’s primary customers happy. Those customers, principally small, independent specialty sporting goods store, did not want North Face to market its merchandise to major discount retailers such as Walmart and Costco. Economic realities eventually forced North Face’s executives to begin selling the company’s products to the mainstream market via backdoor marketing channels. Unfortunately, the company’s relatively high-priced merchandise did not compete effectively with the

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