Lancer Gallery Lancer Galery is limited ability company that sources and sells a wide avety ft South American and Alcan ates It alo a major source of southwester Tndian—cspecally Hopi and Navajo—authentie jewelry and potery. Abthoogh the Bras neadquarters leat in Phocnbs, Arizona there are currently branch ‘offices in Los Angeles, Miami, ae Boston. Tancer Gallery ornate a tading post operation nent Twcxon, Astana, the ealy 1900s, tough a series of adicious deste, the company established itself ae one of dhe more seputale desler in authente southwestern jewelry and pottery. Over the yeas Lancer gradwaly expanded is proct ie to lnelud e- Columbian sefacts from Peru and Venezvela (sce Exit 1) and bal and burial anifcts from Area, Through ie careful verestion of te authenticity of these South American and Aficanatifacts, Ineer developed national repatation 35 ‘one ofthe most respected sources of these rypes of arta 2001, Lancer farther expanded is peut line to incude items that were ‘epics of suthentie aries. For example, African feriity ods and mass were imide by ertspeople who took great pains to produce these stems so that only the tly knowledgeable buyers collector—wvoold know that they were top Ticas, Lancer now has long-term contracts with aative craftspeople in Central Ameria, South America, Alc, ad the southwestern United States who pro- ‘ce these ems. Replicas account for only asia portion of total Lancer sles ‘he company agreed to enter thi business only atthe pring ofthe fw’ cl tents, who desired an expanded line. The replicas have found most vor among divas looking for decorative lems gone sales are about $35 milion ad have increased at a rl tively constant rte of 20 percent per year over the last decade, Myron Ranga ‘he fms national sales manager, attributed the sales inczease to the popularity fof the company’s product line and to the expanded dstribution of South Anes fan and Afican aac Yor some reson, our Sot Amici a ceninly ou Aion acs have ‘ben ining pester ccepence Two of our department sore comers fx fred example of oar Asean ine hi Chis aloes st ea 1 prs ‘iy thine Consamer aera changing. from the meses abet to te ‘more corte, ke or procs. “hs ane wn pep Moles Roger A Ren ofthe amin ot cof Bins, Sat Sassen ten se ce oa hing ant ‘Stomine: Rwrs ef ae Coppi 0 Oy Raper Aen an Robe Pera. Renate an eer est th ete paso opp ac 3[ERIERRIY can ceremoniat task and Pre Colrblan Waterss Lancer distributes its products exchasively through special dealers Gnclud- ing selected interior desigaers and decorator), fiemsponsored showings and & Fewvexchusive department stores. Often, the company i the sole supple tise ft Ranga seen expressed the reasons fortis highly limited istibetion vr int dsibton has Been dead to we becte ofthe aati of 0 product Ine Ar acceptance prem, we expr ob dtbton to specay ‘Sealers an some excsve depavinen ores, Peo, we Bed pas out Prodsts though our on showings Furthermore, we stdin hae the poo et These South Aeican arate ent always eas to et ad the peal ‘Station n Af Is ining ou spp. Our perennial sippy peblam fas be ‘ome evn more cea! nr fecet years fr several reason. NOt onl ast We ‘Sch ter for new praise the competion Yor shone arta a Incense ene. top of th, we pus now contend wth goernments Not ‘lowing exportation of ean aac Bocuse of Whee national sgnieance “The problem of supply has forced Lancer toad hive new buyers inthe Ist ‘wo years, Whereas Lancet identified 5 major competitors a decade ago, thee are 1 teday. “Our bargaiing positon has eroded,” noted David Olsen, dircctor of [vacate “We Ive rel ws gums nrg lip out yours a resive competitive bidding by others” “And competion atthe retail level has increased also,” injecte! Rangard “Not only are some of our lager specialty and exclusive depadtmnent stove cus tomers sending out teie own buyers to deal dgctly with some of out Hep, [avaj, and African sousees, but alo we are ater faced with amateurs or Ay by right competitors, These people move tala 3 ety and dump a bunch of nauthen- {junk on the public at exoebitant prices. Such antes give the indusey a bad name” Rengard acknowledged that high-quality, auheatially made decocative fens were also available oa the Internet (Se, for example, authenticafrca.com and noviencom)#2 CrRArTER 4 OpPORTINETY ANALYSS MARKET SEGMENTATION, AND MARKET TARGETING | recent article in ican Coletor magazine supported Rangards observs- tion Acconing tothe article, whic featured Affean artifacts: tes bet toby from 2 dealer you can rt since 2 growing number of fakes re toring up om he maker Throughout Ae, aan in “rf ees smply ‘hurm out copie of utente Henny And sometne, atonal” a created inthe sbsene af any tration. In Kenys, for example, masks made bythe Nc {Ei pope se fox anytere fom $500 620. Hut he Masa ave never ave teas TAccovng fan suhity on Alaa aigoiies "90% of wha cong intone uss ar ress or oui se a's nat ko” ta eecent years, several sass merchandise department store cin have be- gun to sell merchandise similar to that offered by Lancer. Even though product fuatty was often mined snd anos item were eplica, occasionally an authentic {Toup ofitems was found in these stores, according to company sales represents fives Subsecquen ingires by both Rangard and Olsen reveled that two con pettors had signed purchase contracts with these outlets. Moreover, the tems ‘ere iypealy being sold at seal prices below those charge! By the company’s ‘estes Tm eal January 2010, Rangard was contacted by a masssmecchandise de ppantinent store chain concerning the possibilty of carrying a complete line of Eancer products a parity fall assortment of authente tenis. The chain twas curently selina competitors ems but wished to ada more exeosive product line, A tentative contract submited by the chan stated that it woul buy £110 percent below the company's existing pices, and that Ms inkl purchase trout he for no tess than 370,000, Depending on consumer aceptance, pur Chases were estimated fo beat least $4 mulion aanuaily. An importa clase fa the contact dealt ith the supply of replicas. Inspection ofthis cause sevealed that Lancer would have to tiple Ks replica production to sally the contact ‘bligation. Soon after Lancer executives began discussing the contac, the com pays president, Andrew Smythe, mentioned that accepting the contact cout faves dramatic eect on how Lancer defined its business. Smythe added: “Te contact presents with a appoctundy to rede cur firms positon, The Uses that we ave the pote toad 4 milion ato tks overs Mone our ost pow hie plot beens revente growth ha sowed de tole ecsson ite ther han, 30 we want cml sca ge pescent Stour business to reps? stat he dots tha he makes golng? What {Etc scott ave ono Cent estes a, night 26 on ce Tat yu both Ranga and Ose) to conser dhs contac in ight of | sour ener fancons andthe company 22 whole, Let's meet i few days tedace ths mater aan, a An ttre, 2008, 918