Lancer Gallery" Marketing Case Analysis
Introduction:
For any business to be successful, it has to possess unique features, different from the competitors, which make it more attractive for customers. At the same time, to ensure resilience in the market, it is essential to have a business model that cannot be easily copied by others. Through these factors, a business can continue to thrive without worrying much about its rivals. In the case of the Lancer Gallery, it is obvious that their business model is easy to imitate, which makes its’ products vulnerable to fake reproductions. However, some businesses continue to outdo their competitors despite having a simple business idea, due to possession of remarkable management and marketing
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strategies, which help them to win the loyalty of customers. Therefore, despite that Lancer faces the challenge of having replicas of its products in the market, it can focus on developing strategic marketing techniques that will continue to ensure its survival in the market. Part 1: The product-market focus matrix for Lancer’s product might describe as below: o Lancer Gallery's business is targeting two consumers’ groups: o The primary group is collectors looking for valuable, unique authentic scarce historical artifacts to be a pleasure of owning it. o The other group is consumers from the emerging market of gifts' buyers and decorative market, looking for the replica authentic artifacts to bring out the artistic sense of owning it. The business of Lancer Galley can be defined as one that has a great potential to outdo its competitors if only the strategizing of marketing and management is done excellently.
Factually, the business has been in existence for a longer period that the one of its competitors. Therefore, the fact that the other upcoming companies have eroded Lancer Galley’s bargaining potential shows that the company is behind in certain substantial aspects of marketing. Moreover, it can utilize the available offerings to expand its market through enhanced product promotion. The firm can increase its market share within the existing segment or even expand into new market …show more content…
segments. Inherently, the mass merchandiser stores are selling goods that are similar to Lancer’s products. Therefore, these new stores are likely to decrease the market commanding power that Lancer has been enjoying, especially if they have superior marketing and customer service strategies. If this happens, then the ability of the firm to penetrate new markets will be reduced significantly. Notably, Lancer’s distinctive competency is the ability to monitor and enhance the quality of its distribution channels in order to ensure that its brand is not diluted.
Moreover, the company’s president has emphasized the need to preserve the quality of its products as well as its reputation among customers, by not committing a large portion of their business to replica products. Essentially, the match between the market opportunities and organizational strengths is not present since the firm is not utilizing available opportunities to enhance its competitive power. For instance, one of their strength has been the quality of their supply chain, but with the rise of the mass merchandiser stores, the company has been unable to create strategies to avoid being eliminated by these stores.
The relationship between the company and its distributors is remarkable since the firm ensures that its products are distributed by specific people. This feature is essential since customers are looking for dealers that they can trust. Therefore, if the company does not strive to prevent counterfeit products being sold by its name, then its brand is likely to be dented by those fake
products. Moreover, the company should only accept the offer if the market research shows that the consumers are moving toward the replicas. Notably, the president has questioned the direction to which the market is going and has commissioned his subordinates to determine the effect that the contract might have on their current dealers as well as their customers. Therefore, if the demand for the replicas is not likely to increase, then the firm should not accept that contract. By accepting the mass merchandiser’s offer that would have a positive effect on the business by tripling the replicas produced, which will be as a result in a rising demand and sales of the second group of consumers. However, the replica items need to be differentiated with those true authentic artifacts by the true knowledge of the purchaser; otherwise it might consider them as fakes. On the other hand, the offer might alter the definition of the company, which may have a negative effect on the status of the company since it has been working hard to develop a national reputation as the most respected sources of these kinds of artifacts since years. Part 2: Strengths: One of the key strengths of the company is their product diversification strategy, which has seen them expand their source of artifacts. Notably, Lancer Galley has expanded its product line to include artifacts from countries in South America, such as Colombia and Peru, as well as India. Secondly, the company distributes through specialty dealers. The aspect of being discreet with the selection of suppliers helps them to maintain the authenticity of their products by avoiding the selling of fake materials under their brand name. Weaknesses: A major weakness in the firm’s business plan is the decision to make replicas of authentic customers, in the name of them being original. Essentially, the firm hopes that only the truly knowledgeable buyers would recognize that those artifacts are not original. The rest of the customers will buy the artifacts thinking they are authentic, but in the real sense they are not. This aspect is detrimental to the firm’s image among the customers since after realizing that they bought “fake” products, they are not likely to make repeat purchases. Although the replicas account for only a small portion of the firm’s sale, their effect on the overall reputation of the firm is significant since communication among consumers is widespread. In fact, the case cites a study by the African Collector magazine, which reveals that there is a rising concern among customers with regard to the presence of fake products; hence, buyers are going to those dealers they can trust. Opportunities: Notably, artifacts are usually products intended for the older segment of the population. Therefore, the company should consider diversifying their products further to include items that will attract the young people in the population. This aspect is necessary to ensure that the firm’s activities are not restricted to a particular portion of the consumer base. For instance, the firm may consider stocking native jewelry from the African, Indian, and South American markets, which are more attractive to young people. Threats: The fact that the number of competitors is on the rise poses a substantial threat to the market share of the company. In essence, the case study shows that about a decade age, the company had identified only five strong competitors, but the number has now risen to eleven. The high number of rival companies is significant in the sense that if they offer equally or more attractive products, then Lancer Galley will most likely have limited power in the market since supplier and buyers will opt to trade with the other firms. For instance, David Oslen, the director of procurement, expressed that the company’s bargaining position has eroded in the past few years, which is most likely caused by the increasing competition. Understanding the Business: Essentially, Lancer’s main target is the aged population since this segment fancies traditional artefacts. Essentially, the younger people are more interested in modern technological products rather than the traditional artefacts. Notably, the products offered to this segment include the artefacts obtained from South American, African, and Indian cultures. Primarily, the market is served by way of speciality dealers who distribute the product to retailers. Additionally, the customers can access Lancer’s products from various firm-sponsored showings and selected departmental stores. The conclusion: Lancer Gallery is a firm that can rise above its rival companies if effective marketing strategies are implemented. The fact that it has been in existence for a long time gives it a competitive advantage in that most of the consumers are aware of this brand. Since the research conducted by the African Collector magazine shows that customers are looking for trustworthy dealers, the company should focus on winning the hearts of consumers by minimizing or eliminating the sale of replicas so that customers can have trust in the quality of their products. Moreover, diversification of the range of products in order to target the younger people should also be considered.
Lancer’s national sales manager, Myron Rangard, identified changing consumer preferences from modern/abstract décor to more concrete items. This increase in demand for replicas changed the market, and left the door open for more competitors and bottom feeders. David Olsen, director of procurement, noted that over a decade ago Lancer only had about 5 competitors, today it has 11. As well as serious competition, Lancer also has to combat amateur sellers and “fly-by-night” competitors. These individuals move into a new city and dump a bunch of inauthentic junk on the market at exorbitant
Porter’s Five Forces is defined as threats of new entrants, bargaining power of suppliers, power of buyers, the threat of substitutes and rivalry among existing competitors. New entrants into the industry aim to gain market share from rivals, so the intensity of competition may require to make changes on current strategy of marketing to maintain existing market share. The bargaining power of suppliers is one of the threats on the industry where price changes or product quality by suppliers can impact the profitability. Therefore, it is important for the companies to keep alternate suppliers or a contract to ensure prices, quality and quantity of the product so to avoid the company's supply from falling behind. The power of buyers can force the companies to lower the prices and offer different type products and service. Buyer can threaten the company with the competitors which may cause a negative impact on the bottom line to the companies. Thus, it is important to create a loyalty market share to avoid this threat. The threat of substitutes increases when another industry offers a similar product or services to customers within the same industry with a lower price. In this case, the industry profitability sinks since the product is available at a better price. This threat forces most competitors to price match or better performance. Rivalry among existing competitors ...
Nevertheless, it must “defend” its current market share if not increase it, by maintaining premium quality and develop innovative products. The marketing mix strategies will effectively achieve targeted revenue and profitability in the near future.
Offering special products is marked under strengths and opportunity; however, long term sustainability must ease the weaknesses and threats posed by competitors and external markets forces. However, they are several other strengths of this company that outweigh the weaknesses but can easily be threatened. Lululemon has a great brand equity and knowledge in the market which has helped them development a customer loyalty. While Lululemon’s strengths is challenging, limiting their products to a special market, with higher than normal prices opens the markets for competitors. Lululemon has several weaknesses, they only offer a specialty product and it mostly aimed to attract woman. The company’s profitability has decreased over the recent years, showing the necessity for Lululemon to sustain its economic growth through product diversification and geographical expansion. Many of their competitors have grown, mostly likely due to their global growth and divarication. If Lululemon would expand their market growth this would open up so much more opportunity for this company to grow. One of their weaknesses is there is the dependence on suppliers. This opens a great opportunity for Lululemon, right now they are heavily relying on suppliers around the world and they do not have their own manufacturing facilities. This is causing the company to spend more money of vendors to
According to the article we see that Columbia’s focus on the supply chain was based on an analytic software, which led to an increase in profit, but left out how customers feel about their product and service. Building a direct relationship with their customers will help solve most of the problems discussed, if not all. Columbia Sportswear is a company that can afford to better its customer service, shipping and return policy, by allocating funds that will set workshops with its board-members in finding strategies that will build a better relationship with their customers looking at the different problems identified, their income statement for previous years shows that there has been an increase in Net Income for the past two years, so money will not be an hindrance in tackling this problem. Columbia have shown they have the skills to boost profits, which is shown in the analytic system they implemented and these system cannot run without having experts that will be in charge, these same skills could be applied by their professionals to find strategies that will build a strong relationships with its customers. Their capability is certain because they have been taking steps in other to make more profit, an example will be selling products at the full price rather than the discounted price as discussed in the
Some core competencies that must be exploited are: Brand Kmart is an existing well-known and trusted national brand in USA Kmart has private label and designer clothing that is well endorsed Infrastructure Kmart has a large number of well-located, low-cost, leased stores in urban far away from competitors through out the country ( Appendix B ). Staffing Confidence by the market in Kmart is created by the achievements of its staff and management. With the turn-around strategy in place, new blood has been put into the top management structures. In any renewal there will be retrenchment as unprofitable stores are closed. This can be used as an opportunity to retain and move high performing staff to where they are needed and to get rid of non-performing staff. Anderson the chairperson of Kmart is well supported by Wall Street and the board of Directors. These new staff members enter the company with needed skills to address problems in certain areas that previously were poorly managed such as inventory control and merchandising. Store locations, layout and Performance Stores conveniently located away from competitors like Wal-mart and Target therefore less to compete for customers face-to-face. There are 250 non-performing stores who have already been identified as being more cost effective to close than continue with running costs. Expertise exists in-house for the planning of store layout and appearance to meet different customer segments. This concentration of effort will enable focus on key areas Technology Kmart has already invested in good retailing systems. The system can be use to control inventory, supplier payments, track customer buying and monitor income versus profit margins across all stores. Research and Development The planning department is well established and in cross-functional to provide various perspective. The planning department to ensure that strategies at all levels are executed can further use the access to past data and knowledge of changes in buying patterns. Financial Backing JP Morgan Chase has agreed to support Kmart to avert the current threat of closure due to bankruptcy.
Management experience will also play a large role in the success of the forecast. The current team is quite new and will gain some needed experience over the next year in the hopes of staying on track for success. The ability of management to ensure product is readily available for the client, their training techniques with new and seasoned associates, and general management style will ensure success or spell defeat for the store.
After a 4 P analysis of the company one found that it found itself in a luxury market where product quality and constant innovation are key points for the success. That is why the production process and its design can take even months. Product line is extensive however it is only conformed of high priced products. Price in this case is a guarantee of the quality present in the product. Moreover, high pricing represent an element of differentiation that the customer appreciates. However this is not a setback, LVMH has managed to have world wide presence and success. To accomplish it its selective retailing division is of high importance. Nevertheless, promotion posses the major challenge since its through this that the image of the product its transmitted that is why the company poses a major part of its budget in this section. It is Important to note that the percentage allocated is higher than those of most competitors.
Hunsk Engines is a motorcycle company that made the fatal mistake of expanding its research in the market on its new products. The companies main competitors were companies like Harley Davidson, where they sold classic products that were seen as something with altering respect. Marty Echt is hired on by Hunsk Engines to restore the company’s image, on what used to be classic motorcycles. He argues that the company made the mistake of forgetting about its original products and, “lost its identity”. This problem frequently happens when companies attempt to grow, in order for new products to make it in the market place you have to carefully strategize its competitive characteristics and know when to introduce a new product through Michael Porters life cycle.
The weaknesses to implement a new strategy are self-conceived via issuing poor customer service, limited consumer choice, limiting the consumer shopping experience to one method (indirect – phone, mail order, internet), and failing to measure quality before selling thousands of faulty products, thereby costing the firm significant amounts of profit and negatively altering the customer-base as a result of these actions.
Within the fashion industry, there are major challenges that all companies face. In particular, for the bigger brands, there is always a chance for smaller, lesser known brands to take over at any time. This is why it is important to realize that although a company may be thriving, they have to continue to evolve creativity and consistently in order to maximize sales and stay competitive with their competition. A few companies that experience these threats and challenges on a daily bases include, The Hudson’s Bay (fashion department), Aritzia and H&M that many identify with as their ‘go-to’ stores. These are a just a few examples of the many companies that need to uphold their standard within the fashion industry. They need to do this to ensure
... unordinary supply chain, which gives them a highly competitive advantage. They also successfully introduced a new, unique business model into the apparel manufacturing and retail industry. Zara chose to handle design, production and distribution in-house and concentrate the whole production close to their headquarters in Spain. By the entire process, Zara can react much faster than its competitors do to both the ephemeral trends in the world of fashion and the capricious tastes of its customers. They have achieved their success by thinking out of the box. Their success is directly related to their ability to understand their customer’s most innate needs and desires and tie these to successful innovation strategies, which ultimately lead to these new and unique approaches to their business.
... concept is inadequate. The concept according to majority of retailers is just dressing a window, or just an unnecessary expenditure. The competitors’ today have an astonishing retail design stock and will have to compete purely on master merchandising and the technological edge.
The ability of the management in positioning and establishing the product is a success in any company that operates for marketing and profit acquisition. Furthermore, the ability of the company and its management to complete and maintain a competitive edge among its competitor throughout the product differentiation is another basis to say that is successful. Also, innovation and the constant development on the product lines and the growing number of customers also define the corporate standing of a company. Effective branding strategy and strong brand name are an important part of the profitable business. But, all the strategies and all marketing theories can be worth nothing without the compliance of the desires of consumers.
Trademarks are the foundation of competition for businesses and it grants the freedom of choice to buyers. In the jungle of products, trademarks help buyers to get exactly what they want to buy. It is the function of a trademark to give an indication to the purchaser as to the manufacturing or quality of the goods. Therefore it is necessary to protect the trademark and its distinctiveness as perceived by public. Trademark law generally deals with the protection of trademark from being infringed when unauthorized person uses identical or similar mark and causes likelihood of confusion in the minds of consumer. In today’s world where consumers purchase products not based on quality or usefulness but instead are carried away by the brand name or the trade symbol which accompany the product, protection of the distinctiveness of the trademark is of utmost importance. Brand is the primary want of consumers and a trademark of a company is a graphical representation of the brand or reputation built by the company in a definite territory within the course of time.