Case Analysis 10/12/2010 Fe’Nix del Sure, LLC Case Analysis Define the Problem- With the rise in popularity of not only the company Fe’nix del Sure but that also of the artifact industry, also came the creation and manipulation of many other companies and individuals that have started to not only try to enter the artifact market but develop fakes and replicas and try to pass them off as authentic pieces at a much lower price then that of Fe’Nix del Sur. With these lowered market prices Fe’nix of course struggles to be able to compete with their 100 percent pieces.
Not only is the process of finding these authentic artifacts expensive but also having them authenticated tends to also be pricey for the company, which in turn causes the prices on their products to increase. The introduction of all of the fakes and replicas has lowered Fe’nix’s market share and gross sales as of late because they are unable to make a profit by lowering their prices to try and keep pace with these companies. This problem continues to grow and they will have to determine how they will handle the introduction of all the new competitors and products.
How can they still offer authentic piece but be able to compete with the lowered prices of competitors? Alternative Identification- 1) Alternative courses of action- the main alternative action they already have begun is the production of their own replicas within the company. Fe’nix del Sur prides themselves on having 100 percent authenticated artifacts from all over the world but with competitors replicating their product and selling at a lower price they have had to alter their marketing mix, even their production to try to retain their market share. The in house production of these replicas is helping them by having both options ithin their store. This provides the consumer with a hands on experience of seeing what an authentic piece looks like and also a replica. Also giving them the option to have an affordable piece for your home of an authentic piece of real history you can put in your home. Other alternative courses of action would be using that well established and trusted authenticating company trait to their advantage offering it to consumers to look at pieces either before they buy or right after to determine (if a consumer is looking for an authentic piece) that it indeed is authentic.
This will help them to weed out any consumers who are trying to pass off their products as authentic artifacts at a marked down price. Uncertainties- when it comes to uncertainties in this case there are an abundant amount of them. The main of I think goes back to the competitors and the actions that they are and can take in the future. The artifact art is becoming a increasingly popular fade that has been turning away from modern and abstract art according to our book. The main concern of Fe’nix is companies trying to pass off replicas as the real thing at a marked down price.
Not only is this an action of the competitors that can harm the gross sales of their company but will also affect the market size. The introduction of all the replicas will make the real authentic pieces worth less especially if the buyer can not tell the difference or is even unaware there is one. Strategic Alternatives- Repositioning or changing products offered by Fe’nix del Sur. By offering new replicas the company will then have the ability to offer both the real authentic piece side by side with a replica at a lower price giving the consumer options. Advertising Campaign for Fe’nix del Sure.
Developing a marketing and advertising campaign that takes advantage of their well respected authentication process. Giving consumers the chance to determine if a piece they found is indeed a genuine artifact or not. This will give them the chance to dwindle would some of the companies that may be trying to sell fake products. Tatical Alternatives- Lower Prices- by lowering their prices their gross profit will take a hit but they will be able to sell more merchandise. Expand Distribution circle. Currently Fe’nix del Sur is keeping themselves to a “highly limited” distribution circle as the case said.
With the rise in demand of artifact art people may not make the extra ten minute drive to get an authentic piece if a replica is in their home town mall. By expanding their distribution this will allow them to supply more people to better fit the current demand. But however sometime expanding the width of their product line can be risky. Alternative Evaluation- The next step in the process of this case would be to review all of your possible alternative to your stronger possibilities using common, defined evaluation criteria.
This would involve reviewing the planning process for each of the alternatives- examples would be if it; is cost efficient, what would be the timeline for the alternative, what are the goals and objective for the improvement. Using the evaluation criteria we look first at changing some of the products offered and now offering for replicas as options to consumers, this is a time and money consuming option to Fe’nix but could provide long term benefits. Things that will be needed is a factory, machinery, more employees, raw materials, and more. This could end up being a money trap if not operated properly.
As for figures on what kind of increase this would cost them there are no income statements or other financial information about Fe’nix available. I do believe establishing a budget to help control any spending if they do go down this road will be very important. Recommendations- * Target Market- the target market for Fe’nix should range from the middle age to upper age demographic. From 30’s on up is a good choice to try to bring into the store. Anything underneath this will not have as much disposible income and may be looking for the cheap replica rather then an authentic piece that Fe’nix prides themselves on. Overall Objectives- the marketing strategy can by very delicate step to the process. Fe’nix needs to determine if they will fall into the replica game for good and become just an art dealer or if they will want to keep dealing with history and artifacts. I believe they should stand strong with the Artifacts and not fall to much into dealing any replicas. This could take away from some of the credibility they have been establishing since the 1900’s. Put forth a campaign talking about how Fe’nix del Sur has the real genuine pieces and ad the authentication process that other companies do not to prove it. This retains the respect you have in the artifact world while still being able to produce some replicas to maybe pull in the rest of the market who may not have as much disposable income. * Product/Service Objectives- the main strategy that Fe’nix will take is just adding the option of having the replica items available but as well as starting the larger marketing campaign to draw attention to the fact that all of their pieces that they say are authentic are indeed authentic.
So I believe starting a smaller product like of replicas will be helpful and education for consumers to see indeed the difference between the two. At the same time advertising and promoting the fact that all of there artifacts are real. Also providing the option for consumers to get items looked at and authenticated that they are considering buying from another company. When it comes to the tactical the quick fix to this would be to lower their prices. This will keep them up with competition but will make them take a hit in their gross profit.
I think that a small price reduction could help but would not recommend it because your competitors will have the ability to lower prices even more if needed. Sticking out your long term strategic goals is probably the smartest plan in this situation. * Pricing Objectives- Pricing should be set at around 20% of the retail price they expected. This will give Fe’nix de Sul the chance to keep up with the lowered prices in the short time but still retain market share and make some gross profit.
Pricing artifacts can be difficult however because some of them may be considered priceless items so they may have to be priced higher have having a competitor say they have the same thing for half the price even if it is fake or a replica can be hard to compete with. Also giving a price example without having any figures to go off of is a tough to determine where a company should be setting their prices. * Promotion Objective- from the looks of things Fe’nix has been around from the 1900’s relying heavily on word of mouth advertising.
With the sudden explosion of artifact decorating and collect the need to spread the word about their company becomes more critical. Advertising and promotion will have to change and become more straight forward with print ads and other forms of media within the areas that the company is located. Phoenix where their headquarters is will be a good launching pad for an ad campaign to almost use as a test site before launching it nationally. Short term tactical ideas would be just to start getting something into print about the company.
This will have more people seeing the name around and wonder what the store is all about. Your long term and strategy plans would be entering other advertising forms of tv and radio and if the campaign is successful moving it nationally. * Evaluation Plan- after all of your alternative have been put in place you must move onto the evaluation later in the process. The main and strongest way to do with would be using the last stage in DECIDE, Evaluating your Decision- answering questions step by step about all of the alternatives you chose will help you evaluate your choice- * Did I define the problem adequately? I stated the problem with replicas and fakes becoming more common in Fe’nix market which will effect their sales. * Did I identify all possible alternatives? * I believe I found the most feasible alternatives that will help Fe’nix get through a tougher time by changing their product line slightly and offering in house authentication. -Did I consider all information relevant to the case? * There was not a whole bunch of information about the company or the case but I believe everything that was relevant to the case I took into account -Did I recommend the appropriate course of action? By offering a smaller line of replicas they will providing an education of the artifacts as well as still compete on different target markets by now have different levels of pricing. -Did I consider how my recommendation could be implemented- * I tried to locate information about the company and how or if they could implement this options but without any numbers it is tough to say the possibility of this being a strong option.