Lancer Gallery is an art gallery that specializes in authentic South American and African artifacts such as jewelry and pottery as well as replicas. It operates stores in major US cities and works with specialty dealers and exclusive department stores to distribute its products. While the market for artifacts is in the maturity stage, Lancer Gallery faces increased competition from other galleries and customers directly sourcing products. The gallery is recommended to agree to a contract with a large department store to boost sales and consider expanding replica offerings or acquiring competitors to address challenges from limited artifact supplies and rising competition levels.

1. Lancer Gallery
I.
Summary of Facts
A. Market – Native Artifacts/Jewelry/Pottery and Replicas
1. Knowledgeable buyers/collectors
a. Native craftspeople
b. Replica buyers
c. Clients
2. Consumers
a. Gift buyers
b. Individuals looking for decorative items
c. Sole suppliers
3. Economic market
a. Monopolistic Competition
b. Oligopoly (few products)
B. Product
1. South American and African artifacts
a. Jewelry
b. Pottery
c. Replicas of authentic artifacts
2. Benefits
a. Pleasure/Personal use
b. Adding to collections
c. Historical aspects
d. Want authentic artifacts
e. Currency/monetary value
f. Use for a gift
g. Decorations
3. PLC
a. Growth Stage
b. Maturity Stage
C. Price
1. Replicas generate small portions of total sales
2. Artifact prices fluctuate depending on item
3. Gross Margins are $35 million
4. Constant rate of 20% per over last decade
5. Elasticity
a. Relatively inelastic
b. Relatively elastic
D. Promotion
1. Firm-sponsored shows
4. Expansibility
a. Relatively nonexpanisve
b. U.S. based with few locations and competitors
E. Place
1. Locations:
a) Phoenix,
b) Los Angeles,
2

2. c) Miami
d) Boston
2. Distribution centers:
a) specialty dealers
b) firm-sponsored showings
c) exclusive department stores
3. Channel: Lancer Gallery - Agent - Dealer - Consumer/User
F. Other
1. Lancer Gallery's Competition
a. Increased competition with eleven competitors
b. Added three more buyers to compete
c. Customers sending out their own buyers to work with native sources
d. Pricing fluctuating due to selling fake items by competitors
e. Internet competition
2. Lancer's National Standing Reputation
a. Careful verification of authenticity on products
b. Good quality
c. Respected source of artifacts
d. Long-term contracts with Native craftspeople
3. Political and Government Problems
a. Limitation on supply
b. Governments want less exporting
c. Government want national significant artifacts in their own countries
d. Artifacts are not easy to get
II. Problem/Opportunity
A. Primary – Contract with department store
B. Secondary
1. Limited supply of artifacts
2. Increased competition
3. Declining revenue due to economy
III. Recommended Action
A. Primary – Agree to contract with merchandise department store
B. Secondary
1. Create higher volume of replicas
2. Expand to other countries outside South America and Africa
3. Merge or acquire another competitor