marketing case study

Marketing Case Study

Unique business

Business of Sorzal Distributors is not a common one . It does not sell neither soap products nor jeans , but unique South American and African artifacts . On the one hand , this is a very attractive business , which proposes great opportunities for growth , but on the other hand , more and more firms want to enter this market , and more and more restrictions make it less attractive . In spite these facts , Sorzal Distributors is a reputable dealer . Its main products include authentic southwestern jewelry and pottery , and pre-Columbian artifacts

from Peru and Venezuel (Case Study , n .d . Gross Sales of the company is about 12 millions and increased at a rate of 20 per year

Is that the direction that the market is going

It is known fact that effective marketing depends upon effective marketing system employed by a company and its strategy . Such factors as globalization of markets , economic integration and increased competition forced Sorzal Distributors to find new ways to compete . It is one of the most important infrastructure requirements , which is essential for the expansion of opportunities and plays an important role in making the competitive positioning

Sorzal Distributors has a chance to add 1 million in additional sales (Case Study , n .d ) contracting with a mass-merchandise department store chain . In spite of great benefits proposed by this contract , the company will be faced with a threat to become a replicas retailer ' and , probably , will have a negative impact on company 's brand image as a dealer of unique authentic artifacts . It is not an easy decision to make , but before signing the contract the company should answer the question Is that the direction that the market is going (Case Study , n .d

Changing Environment

Sorzal Distributors operates in a simple and static environment . Firms operating in a relatively simple and static environment can generally rely on management strategies that are based on historical data . The strength of Sorzal Distributors is that it 's goods obtained a very competitive position on the market . The brand has a hard core of loyal supporters . It sells lines of products to satisfy the needs of wide audience through specialty shops , firm-sponsored showings , and a few exclusive department stores (Case Study , n .d . Another strength is that Sorzal Distributors is an exclusive suppler of South American and African artifacts . Obtaining strong market position , Sorzal Distributors has maintained high-speed growth through product mix and new product lines

The opportunity of the company is the nature of business and loyalty of customers . As it is mentioned : consumer tastes are changing from the modern and abstract to the more concrete ' like Sorzal 's producrs (Case Study , n .d . The opportunities of Sorzal include : high potential to growth and profitability of the company promotion to other divisions increased revenue from success in national market

In spite opportunities , recent changes threaten the business Political-legal forces allocate power and provide constraining and protecting laws and regulations . Primarily , political changes in Africa resulted in stricter legislation which prohibits exportation of certain artifacts (Case Study , n .d . Another threat is increased competition which include the threat of entry by new competitors , the intensity of rivalry among existing competitors , and pressure from substitute products , primarily replicates . Recent years , the number of competitors increased from 5 to 11 , and , according to David Olsen bargaining position of Sorzal has eroded (Case Study , n .d . The company has watched our gross margin slip in recent years due to aggressive competitive bidding by others (Case Study , n .d

The weakness of the company is changing economic situation which requires new forms of strategy in to compete on the limited and narrow market of artifacts . Limited destitution is also a weakness of the company

New Strategy

In to solve these problems and sustain competitive position Sorzal should accept a competition strategy , instead of a competitive advantage . It is possible to admit that market of artifact is really needed low quality replicates such as produced and sold by Sorzal competitors . Nevertheless , this marketing strategy is not acceptable for Sorzal , which obtains a strong market position as a reputable dealer of authentic southwestern jewelry and pottery

Competition strategy will take place on a price and a non-price basis and will help Sorzal to compete on the national market . Price competition involves businesses trying to undercut each other 's prices this will , in turn , be dependent upon their ability to reduce their costs of production . Brand image and loyalty of customers should be the main criteria for Sorzal . This strategy will help to stay on top nationally and sustain competitive position as an exclusive distributor of South American and African artifacts . Marketing strategy based on the non-price competition should take form of branding , advertising promotion , and additional services to customers (Johnson , Scholes 1998

An alternative policy for Sorzal is to accept replicates distribution strategy . On the one hand , this strategy will help to add additional sales , but on the other hand , it will have a very negative impact on the company 's reputation . This strategy does not help to compete on the market for a long time , and increase the threat of substitution

The best solution for Sorzal is mass advertising campaign and opening new exclusive stores in to attracted potential customers . In relation to minor competitors , Sorzal should provide comparable buyer value but perform the activities more efficiently so as to attain a cost advantage , or perform the activities in a unique way which raises the value to the consumer and thus allows them to command a premium price

If Sorzal follows its present say strategy (as an exclusive distributor of authntic artifacts , it will sustain its dominant position as a top brand , while expanding its operations and becomes a main player in the market . Nevertheless , flexibility is the most important infrastructure requirement , which is essential for the expansion of opportunities , and plays an important role in making and breaking the competitive positioning

References

Case Study : Sorzal Distributors . N .d . Available at : HYPERLINK "http /academic .cemalekin .com /strategy /sorzal_case .pdf http /academic .cemalekin .com /strategy /sorzal_case .pdf

Johnson , G , Scholes , K . Exploring Corporate Strategy . Hemel Hempstead Prentice Hall . 1998

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