CASE 15
TEACHING NOTES
THE OPTICAL SHOP
1. Identify the key issues faced by the Optical Shop.
Issue #1: Should the Optical Shop include a brochure with appointment
confirmation letters?
Issue #2: Should the Optical Shop add a second optometrist?
Issue #3: Should the Optical Shop offer an explicit written guarantee?
Issue #4: If the above issues are all implemented, what other changes to the
Clinic’s operation would be necessary?
2. Provide three alternative solutions for each of the key issues faced by
The Optical Shop? 3. Discuss the pros and cons of each alternative
solution provided above. (#2 and #3 are discussed below).
Issue #1: Should the Optical Shop include a brochure with appointment
confirmation letters?
Advantages:
1. Many of the Clinic’s ophthalmologists were reluctant to refer the Optical Shop
to their patients—they felt like they were acting like retail sales people as
opposed to being medical personnel (person/role conflict). The brochure would
help these patients become aware that the Optical Shop existed and remove the
pressure from the ophthalmologists.
2. Sending the brochure to clients would act as a pull strategy as opposed to the
traditional push strategy (e.g., patients having prescriptions filled where
recommended by doctors).
3. The brochure may help dispel perceptions that non-sale prices are lower at
competitors.
4. If successful, the Optical Shop would add revenues and income to the Clinic.
5. Optical Shop customers typically have complex issues which should make
them less price sensitive. Given the Clinic’s reputation, a brochure would likely
increase business providing added convenience to customers and continuity of
care for the Clinic’s medical staff.
6. Given the restraints placed on the Optical Shop by its tax-free status, a
brochure is one of the few internal marketing options that is not currently being
exploited. Current internal marketing approaches include word-of-mouth among
patients, referrals from doctors, a small display case inside the clinic, a sign, and
physically placing an optometrist within the Optical Shop.
7. Sending brochures with appointment confirmation letters makes sense in that
the Clinic is not allowed to market to anyone other than existing patients.
Currently, Clinic patients and DHMC employees comprise 70% of the Optical
Shop’s business.
Disadvantages:
1. Some felt that competition with local optometrists for “well eye care”
customers was an inappropriate part of the Eye Clinic’s mission. In other words,
is making money in conflict with the Clinic’s mission?
2. Others feared the reaction of local optometrists who referred many of their
patients with more complex conditions to the Clinic.
3. Some worried that optical dispensaries were viewed as “less than ethical” and
that this image may transfer and dilute the image of the Clinic.
4. Brochure may be viewed as too “pushy” of a sales technique.
5. Hard to compete with competition without directly comparing—which is not an
acceptable outcome.
Options for Issue #1 may include:
A. Implement the brochure strategy
B. Do not implement the brochure strategy
C. Pursue another internal marketing strategy such as “refer a friend” or other
such program.
Advantages and disadvantages of each would include a combination of those
points listed above.
Issue #2: Should the Optical Shop add a second optometrist?
Advantages:
1. Adding another optometrist would increase revenues.
2. Adding another optometrist would reduce the current backlog of appointments
(4 weeks compared to 2 days for most competitors).
3. Adding another optometrist would allow The Optical Shop to experiment with
the concept of a “glasses emergency”—an express service for those needing
immediate help.
Disadvantages:
1. Adding a second optometrist would mean that the Clinic would be competing
more for the “well eye care” segment of the business which many felt was in
conflict with the Clinic’s mission.
2. If successful, would staff still be able to provide the level of care necessary for
complex cases if the shop was packed with customers?
3. What would be the reaction from local optometrists who currently provided
patient referrals to the Clinic (but who also sold glasses)?
4. What would be the reaction from Clinic ophthalmologists who were already
reluctant to refer their patients to The Optical Shop?
Options for Issue #2 may include:
A. Adding an additional optometrist.
B. Not adding an additional optometrist.
C. Hiring someone part-time or some other hybrid strategy.
Advantages and disadvantages of each would include a combination of those
points listed above.
Issue #3: Should the Optical Shop offer an explicit written guarantee?
Key indicators of satisfaction include fit, appearance and performance in the
short-term and durability in the long-term. Other considerations include
turnaround time, prescriptions written in error, erroneous measurements taken in
a dispensary, and the method in which the eyeglasses were ground in the lab.
Customer error is another source of problems as some customers are not
concentrating enough during the exam (resulting in a wrong prescription). Many
doctors feel that 100% satisfaction is not possible. Some lenses and frames are
cheap while other more expensive models are more reliable. Should all frames
receive the same warranty (most already come with a one-year warranty). One
doctor commented that half of their time was already spent on “adjustments” for
“walk-ins”—would a guarantee make things even worse?
Advantages:
1. Customers perceive a better value
2. Lowers perceived risk
3. The firm is perceived as more reliable
4. Helps consumers decide among competing alternatives
5. Helps consumes overcome resistance
6. Helps overcome negative word-of-mouth
Disadvantages:
1. May be viewed as a tacky marketing ploy.
2. Customers may wonder if guarantee is due to failures in the past.
3. Customers may be too embarrassed to invoke a guarantee (e.g, customer
experiences a little problem and does not want to make a big fuss).
4. Documentation and actual time for refund to be completed.
5. Guarantee may encourage customers not to complain.
6. Guarantee may be invoked for some superficial reason.
Options for Issue #3 may include:
A. Implementing an implicit guarantee
B. Implementing an unconditional guarantee.
C. Implementing a specific result guarantee.
Advantages and disadvantages of each would include a combination of those
points listed above. Chapter 15 provides an indepth explanation of each of three
types of guarantees listed above.
Issue #4: If the above issues are all implemented, what other changes to
the clinic’ operation would be necessary?
Students do not have a lot of information available to them to discuss alternatives
and pros and cons; however, other issues do become apparent such as:
1. If The Optical Shop adds another optometrist should the Clinic add another
exam room to the Optical Shop or split exams between the Clinic and the Optical
Shop? Records indicate that sales soar when exams are done in the Optical
Shop itself.
2. Should The Optical Shop add a lab to grind its own glasses? According to
case endnotes a lab to grind single-vision lenses costs between $40,000 and
$50,000.
3. DHMC employs 4000 people who for 30% of The Optical Shop’s business.
Should employee discounts and payroll deductions for eyewear be considered?
4. Provide an overall recommendation for The Optical Shop and justify
your answer based on course material.
Student recommendations and justifications can vary based on their
interpretation of the Hitchcock Clinic’s mission statement.
What do students believe the Clinic’s mission should be—continuity of care,
extended service, or profitability?