The lacquer is supplied with the touch up paint. Personally I'd recommend using it after applying the paint, leaving it for a week or so to dry, then polishing it out.
Make sure the surface is completely clean and free of any wax or silicone otherwise the paint won't stick properly. Claying the area around the chip thoroughly before you start is one way of achieving this.
Applying several thin coats is much better than putting on a large blob of paint.