Lancer Gallery - Strategic Marketing

Strategic Marketing

Lancer Gallery.

Case Discussion Guidelines

LEON Lorélei

A mass merchandise department store chain has recently offered Lancer Gallery a contract to deliver a full line of replica artifacts that could generate $750,000 to $4 million in sales annually.  They must soon decide whether or not to accept the contract.  This decision is likely to impact the future direction of the company.  

Write your 1-2 page summary focusing on questions 4 and 5 below, but bring facts to bear from the other questions to support your case.

Lancer and Gallery is a company specialized in the sell of South American and African artifacts. There are located in Phoenix but also have branches in Boston or Miami for instance. Their company is successful and has experienced outstanding results over the last years thanks to a combination of great reputation and their ability to consistently expand their brand. They have become a reference when it comes authentic Southwestern jewelry and pottery

If at the beginning they were focusing on authentic artifacts, they extended their line by adding replicas of authentic artifacts such as African mask. Regarding to their specific product category, the distribution channel used is limited. Indeed, their products are distributed in specialty dealers which include decoration store due to their recent development in replicas, firm-sponsored showings, a few exclusive department store. South American and African artifacts are remaining the core of their business and they are often supplying directly their client.

Over the last year competition has risen sharply and has to face new trends and scarcity. Lancer Gallery suffers competition from department store who are now sending their own buyers to deal with some of Lancer Gallery’s sources. On top of that, they have also to handle competition from amateurs or fly-by-night and also some e-commerce websites and mass-merchandiser. The market is also affected not only by the increase of copies of authentic items but also emergence of fakes items.

Lancer Gallery’s core competency is to be able to unearth authentic artifacts by carrying out a meticulous verification. This competency is an essential since the booming in fakes items that has invaded the market.

In my opinion Lancer Gallery should not accept this contract. Despite the attracting expected turnover of this contract, it will be risky for the company. Indeed, for now, replicas represent a small portion of the company sales and by signing this contract, they will have to triple the production of their replicas. It implies probably a shift in the organization of the business, since now the focus is on authentic artifact.

Accepting this contract will not be the best for Lancer Gallery because it is not just a matter of segmentation or targeting but it will affect the company’s brand identity and brand image. Indeed, Lancer Gallery is a company that recalls authenticity, by shifting their business to the production of replicas can alter their brand identity. Furthermore, the company has been sustaining reasonable growth over the past years and replicas are only a small amount of their revenue. Shifting to replicas means to do like the competitions and to follow an inside out strategy. The company should not put aside its core competency and on the contrary stick with it to be more profitable.