Magic Crafters Read the case below and then answer the following 7 (seven) questions. (Total Marks: 45)

Tom has run a profitable and successful optical store in London, Ontario for the last 25 years. In the last few years, changes have been taking place at an increasing rate. Below is a summary of what Tom told me about his business in early September 2022. I have been an optician for 25 years and have built a successful business that has always achieved its annual profit objectives. Over the years, I have successfully adjusted to many changes and obstacles in my business. There have been technological changes such as the introduction of various new types of contact lenses, shatterproof lenses and graduated bifocals. Corrective eye surgery is now widely available and much more affordable than even ten years ago. My staff and I attend seminars and courses so that we are knowledgeable about the latest innovations in lens technology. Other changes have been more difficult. LensCrafters, Hakim Optical, Costco and Walmart operate in Canada. These chains tend to place great emphasis on heavy promotion and low price. In addition, LensCrafters offers the convenience that lenses are ready in about an hour with its onsite lab service. LensCrafters now sells prescription eyewear online and has launched the myLOOK app so customers can share how they look in various frames with friends and family. Clearly.ca launched in 2000 and sold just contact lenses back then. In 2010 clearly.ca launched its own exclusive eye glass designs that are very fashion forward. Clearly now has seven retail locations in total: two in Vancouver, one on Queen Street West in Toronto, one in Calgary, one in Edmonton, one in Ottawa, and one in Mississauga. The share of market held by independent opticians such as Magic Crafters is declining as the price-sensitive segment of the market grows. However, I am lucky; my sales are growing thanks to the aging baby boomers that are between the ages of 55 and 75 (in 2022). As people age, usually starting in their 40s, they tend to need reading glasses or glasses for distance. Even people who wear contact lenses often require reading glasses for close work. To protect my business against my large, price-oriented competitors, I upgraded the type of frames carried in the store. We place the emphasis on well-known, quality designer frames such as Gucci, Chanel, Hugo Boss, Bvlgari, Versace, etc. It is not uncommon for a customer to pay $600.00 - $900.00 for a pair of glasses from my store. This is very different from the discount stores, where I think the average price would probably be in the $200.00 - $300.00 range. Store staff and I give the customer as much time as needed for choosing the proper frames, to fully answer questions and to explain any technical differences between the options available. We never rush a decision. In fact, many of our customers have been dealing with us for years, and, if possible, we try to greet them by name and acknowledge the fact that we recognize and appreciate their ongoing business. Based on statistics, the average pair of glasses lasts two years. However, many of my customers are working women who are not only fashion conscious but very successful and they buy new frames at least once a year. I help clients to not only see better, but also look better and convey the image that they want. A frame makes a statement on your face, and the statement changes from style to style. To support the fashion orientation of my business, I have been showing my customers how they look in a frame for years. I started with a camera and TV playback years ago. Now we use tablets and an app that can be shared with family and friends. Customers do want to objectively see how they look in the frame. Because I do not prescribe lenses, being located close to optometrists and eye doctors who can prescribe corrective lenses provides convenience for clients to come my store after they receive a new vision prescription. I am proud to say that my team and I have an excellent reputation with these optometrists and eye doctors. In fact, some have been referring their patients to Magic Crafters for 20+ years. The promotion budget is small and features a special item or sale. Local print and radio ads are concentrated in periodic short bursts once or twice a year. Our website helps to build trust and confidence in our store and our team. New customers requiring specialized lenses and demanding fashionable frames, have found us through our online presence. Most recent annual sales were $2,500,000.00 and gross profit margin was 50%. Things beyond my control are changing and I am concerned about a new Costco that is going to open about five kilometres away. Tom is uncertain what to do. Magic Crafters has weathered many storms and is still making a very reasonable profit and has a relatively good base of repeat customers. Tom realizes that his loyal customers are getting older, and many of them will be retiring in the next five to seven years. He also knows that he is not getting any younger himself.

1. (8 marks) Perform a SWOT analysis. Point form is acceptable. Make sure your meaning is clear. For each one, include no more than three items; if you find more than three, only include the three items that you believe to be the most important.

2. (8 marks) What consumer segments do you see in this market - describe at least two different ones based on demographic, psychographic and behavioural segmentation variables.

3. (2 marks) Identify the market segment/s that Magic Crafters targets.

4. (10 Marks) Write the marketing positioning statements for 5 competitors (LensCrafters, Hakim Optical, Costco, Walmart, Clearly.ca) in this market, using the one sentence: target customer segment, brand, unique point of difference, and reason to believe.

5. (2 marks) Write the marketing positioning statement for Magic Crafters.

6. (9 marks) What are 3 strategic alternatives for Magic Crafters that you believe would support the company's market share and sales growth?

7. (6 marks) For one of the alternatives you suggest, provide an evaluation (pros and cons).