Sorzal Distributors

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Identification of the Strategic Issues and Problems

Sorzal distributors is a nationally recognized importer and distributor of a wide variety of South American and African artifacts and a major provider of southwestern Indian authentic jewelry and pottery. Based in Phoenix, Arizona, the company is a well established organization that has built its reputation on customer satisfaction through the verification of every piece of artifacts it imports. Expansion of the company led to establish offices in L.A, Miami and Boston where new products were included to the company's line of products like pre-Columbian artifacts from Peru and Venezuela as well as burial artifacts from Africa. To respond to its customers' requests, Sorzal included replicas of authentic artifacts that fulfill the needs of gift buyers and consumers seeking decorative items. (R. Kerin, R. Peterson (2005). Strategic Marketing Problems cases and comments (10th Ed.).

The company witnessed an increase in total sales and a wide distribution of its products line. However, the increased competition and the limited supply of its authentic products forced the company to consider the offer of a mass-merchandise department store to carry a line of its products.

The offer made to Sorzal seems interesting since it will boost the company annual sales by an estimated $ 4 Million and allow the artifacts dealer to strengthen its position in the market and compete effectively with its rivals. But accepting this offer will make Sorzal Distributors face a major constraint represented in the fact of tripling their production of replicas which used to represent a small fraction of the company's total sales. (R. Kerin, R. Peterson (2005). Strategic Marketing Problems cases and comments

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(10th Ed.) In fact, Sorzal Distributors would not have a problem in increasing their production of replicas but could suffer serious consequences by doing so. For this reason, Sorzal's managers should weight pros and cons to assess the importance of this opportunity and to take advantage of it. Turning down this offer could make Sorzal loose a good market opportunity it needs to counter the fierce competition it is facing and to increase its annual sales.

Analysis and Evaluation

Today, Sorzal Distributors count eleven major players in the artifacts industry that compete directly with them. This number of competitors -in addition to others- is a proof that the artifacts business is an attractive industry with low entry barriers (in terms of regulations and capital). In fact, the market of artifacts witnesses different players in terms of nature of their products, scope of business and channels of distribution. These can be importers/distributors, specialty dealers, department stores, amateurs and dealers who sell their products through internet. These competitors display fierce competitive moves ranging from dealing directly with Sorzal's suppliers to selling fake artifacts at exorbitant prices in different locations of the country. (R. Kerin, R. Peterson (2005). Strategic Marketing Problems cases and comments (10th Ed.) In such industry circumstances, Sorzal's initial market segmentation has been blurred. Initially, the company targeted buyers of authentic pieces of artifacts in the United States namely collectors, then responded to its small customers number of gift and decorative items buyers. After the entrance of all these competitors to the market, Sorzal should reconsider

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its market segmentation, its ways to reach customers and ways to retain them. The buyer behavior in the artifact market can be traced through customers' frequency of purchases, sales volume of products and new trends in the market. Today the artifacts market counts buyers who are interested in authentic items provided by reputable importers and distributors -such as Sorzal- and who require authenticity certificate for every item purchased (collectors), buyers who are interested in authentic decorative items but purchase the products less frequently than collectors. The market also includes buyers of replicas from trusted dealers or less trusted who charge much less. Buyers of fake items without any artistic value are also part of the market.

Sorzal positioned itself as an importer and distributor of authentic and quality jewelry, pottery and artifacts in the United States. The company thrived to be a reputable and world-known provider of South American and African artifacts for collectors and fanciers. Intermediating in transferring ancient culture and art to the world through tangible items made Sorzal a $25 millions in gross sales company with sales increasing with a constant rate of 20% over the last ten years. Its well- selected distribution system gives the company more credibility by providing its offerings through firm-sponsored showings and few exclusive department stores. (R. Kerin, R. Peterson (2005). Strategic Marketing Problems cases and comments (10th Ed.) By pursuing this strategy, Sorzal developed strong ties with its distributors and customers based on mutual trust and high credibility. The core competency of the firm is defined by the authenticity of its products over what it is marketed by its rivals.

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As stated before, a market opportunity offered by a mass-merchandise department store to Sorzal to carry a whole line of its products put the distributor