Optimeyes: Case Study Notes

Synopsis

One of the strengths of this case is the breadth of the business and marketing issues it encompasses, while still allowing the opportunity for a rigorous analysis of one or two key issues. The key issues facing Optimeyes are how can it successfully alter its marketing strategy in the absence of good market information, and what its new strategy should be. However, the case can also be used in discussions of issues such as the marketing concept, the regulatory environment of marketing, promotional strategy, the role of publicity, and customer service.

Learning Objectives

Model Answers

1. Prepare a SWOT analysis for Optimeyes.

You may find it useful to organize your SWOT material by using the headings found in Table 2.2, External Marketing Audit Checklist and Table 3.3 Internal Marketing Audit Checklist in Chapter Two of the book (p.40).

These are:

External:

Macroenvironment
The Market
Competition

Internal:

Operating Results
Strategic Issues Analysis
Marketing Mix Effectiveness
Marketing Structures
Marketing Systems

 

The essential point to remember is that strengths and weaknesses derive from the Internal Marketing Audit checklist and opportunities and threats derive from the External Marketing Audit Checklist.

No two SWOT analyses are alike, but yours should look something like this:

Strengths

Innovativeness
Product range
Low prices
Quality of service
Fully integrated operations
Geographically diversified
Optimeyes brand name

Weaknesses

Small market share
Lack of capital for investment
Limited promotion budget
High level of current liabilities
Very little market information

Opportunities

Growth in spectacles as fashion
Growth in repeat purchases
Older people
Medium/Small towns

Threats

Market penetration by bigger chains
Aggressive discounting by bigger chains

 

2. What recommendations would you make regarding future marketing strategy for Optimeyes?

Regarding marketing objectives, Optimeyes has the potential to build even in the face of increased competiton.Its strategic thrust will be a combination of market penetration, market development and product development.How this will be achieved will be discussed later.

Our approach to developing marketing strategy is to identify strategic options. Key tools that could be used to generate strategic options are the Porter model of competitive strategy, segmentation, targeting and positioning. If you are not familiar with the Porter model yet, the process of segmentation, targeting and positioning is enough to develop a credible strategy for Optimeyes.

Using the ideas generated from Porter, it is immediately clear that Optimeyes is a small niche player in the business. Its strategic choices are focus low-cost and focus differentiation. The low-cost option can be discounted as the company does not have the requisite scale to drive the price down to levels that even the superopticals cannot match. In any event, the company has been competing on the basis of both higher perceived value, in terms of range, and lower delivered cost than the traditional optometrist and should attempt to continue to compete on both these bases.

Thus, the company must attempt to maintain this lower delivered cost and find suitable ways of differentiating itself from both Specsavers and Vision Express. The question then becomes "What should be the basis for differentiation?" The two qualities that seem to be still unique to Optimeyes are its range of French frames and the quality of its customer service. It might be recommended that the company leverage these two strengths to exploit one of the few opportunities for growth in this business in Ireland, which the case tells us is in the increasing use of spectacles as fashion items, and the fact that Irish consumers generally own only one pair of spectacles compared with a European average of three or four.

Segmentation

In terms of implementing the above strategy, the case affords you the opportunity to conduct a segmentation analysis on three bases, namely demographic, psychographic, and geographic. In terms of demographics, the data show the level of usage by age group and the relevant size of those age groups in Ireland. Similarly, data are available for level of usage classified by socio-economic groups along with details of the size of the socio-economic groups in Ireland. Geographic segmentation raises the issue of whether the company should continue its strategy of expanding throughout the country. Clearly a potentially useful way of segmenting this market is into those people who are fashion conscious and those who are more concerned with the functional aspecs of spectacle.

Market targeting

Given its limited resources and its strategy of focusing on the fashion conscious consumer, you should then nominate on the type of person this is likely to be and should concentrate your marketing effort on them. Fashion leaders are more likely to be young, urban, female, and from the higher socio-economic groups. Using the data in the tables, the size of this target market can be estimated and the analysis could include recommendations on the most suitable media and message to reach this market.

A recommendation might be:

Strategy 1

An alternative marketing strategy would be to target those spectacle wearers who were more functionally (sight) orientated and to choose locations which the new entrants were unlikely to find attractive. This would mean a different targeting, positioning and marketing mix strategy.

Strategy 2

If Optimeyes decides to target both segments, a different brand name may be required for one of the chain of shops as the positionings are so different.

Key Learning Points