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Marketing Management Case 1 1 Year: 2010-12 Batch

THE MARKETING MIX of LWIPL

PRODUCTS AND PRICING

LWIPL had launched its first brand in 1963 - the 'Artist' fountain pen. However,
owing to its small scale of operations during that time, the pens were made
available only in Delhi and surrounding areas. During the late 1960's, the Artist
brand was renamed as 'Luxor.' In 1982, LWIPL launched Pilot 05 microtip pens
with needle point[1]technology.

Priced at Rs.10, this was the first model of Pilot pens to be officially launched in
India.The pens were manufactured at the Delhi plant of LWIPL. Though Pilot
pens were available in India prior to the launch, they were available only in the
grey market. LWIPL invested heavily to upgrade its technology to manufacture
microtip pens. These pens were launched with the intention of bridging the gap
between ball point and fountain pens. Microtip pen was similar to a ball point
pen, with the ink filled within.

This turned out to be a unique selling proposition for Pilot pens and they were
quite successful as they were considered to be an ideal substitute for fountain
pens. LWIPL was able to sell 1,00,000 Pilot pens in the very first year of their
launch. However, the Pilot pens launched initially were not refillable.

Due to the price conscious nature of middle class people in India, the concept of
disposable pens was not cherished for long. This prompted the company to
launch a new, refillable variant of these pens. LWIPL's pricing strategy was
determined by factors such as the demand for products, their brand image and
the nature of the target audience. When Pilot 05 was launched in 1982, it was
priced at Rs.10, and it was considered to be expensive at that time.

However, in 1990, eight years after its launch, when the demand for these pens
reached its peak, Luxor sold them at Rs. 25 each. The price continued to remain
the same till early 2003, indicating the stagnant nature of its demand. On the
other hand, Pilot V5 was priced at Rs.45 at the time of its launch. These pens
were priced high due to its superior technology and the brand image that Pilot
pens enjoyed. However, after 12 years of launch, the price of these pens had to
be reduced by Rs.5.

In 1996, LWIPL launched Parker pens in India. Though Parker pens were
popular in India, they were available only in the grey market. Parker pens were
primarily targeted at the upper middle class consumers, senior level executives
and bureaucrats. The initial range of Parker pens launched included Sonnet,
Rialto, Frontier, Vector and Parker Classic. The most crucial decision for LWIPL
was pricing. At the time of the launch, the prices ranged between Rs.90 to
Rs.10,000. Priced at Rs.90, the "Vector" brand of pens was the cheapest in the

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Marketing Management Case 1 1 Year: 2010-12 Batch

range. Within four years, "Vector" became the largest selling Parker brand in
India. During the corresponding period, the price was increased to Rs. 140.

In 1999, LWIPL launched the 'Papermate' brand of pens in India. Papermate was
the largest selling brand in the US during that time. The brand strengthened the
presence of LWIPL in the low priced pen segment. These pens were primarily
targeted at the school and college students and were priced in the range of Rs 4
to Rs 13. The specialty of this product was that they possessed the Lubrigude ink
technology[1] , which ensured that the ink did not leak, thereby offering a
comfortable writing experience.

In order to penetrate the Indian market, the company offered these global brands
at lower prices. For example, the Parker Vector roller pens were launched at $3
compared to $9 in Europe. The Parker refills were priced at a rate of Rs.35
compared to $3 in Europe. Similarly, LWIPL launched the Papermate pens at
nearly 1/3rd of the price in the US. In 2000, LWIPL launched the Parker Beta
range, with prices ranging between Rs.50 to Rs.75.

Targeted at the youth, the company sold around one million pens within a couple
of months of its launch. In 2002, Parker pens were available in three broad price
categories (Refer Table I). By that time, the Parker range of pens had emerged
as the largest selling brand in the LWIPL pens portfolio, contributing 40% of its
revenues. LWIPL also launched a series of innovative products in order to mark
certain occasions.

In January 2000, the company launched the "Millennium series" of Parker Vector
roller pens. These pens had the world map inscribed on them and their unique
design enabled people to determine the time difference between countries.
Priced at Rs.250 each, these pens became very popular.

In November 2001, LWIPL launched 'Special Moment', a gift pack consisting of

Parker Vector and Parker Beta pens, which had the signature of the brand
ambassador, Amitabh Bacchan inscripted on it. These pens were primarily
targeted at pen collectors, who were fond of Parker pens.

Table I
The Parker Range

MODEL PRICE RANGE (in Rs.)

BETA 50-75
VECTOR, REFLEX. 100-400
1000-5000
SONNET, RITALTO, FRONTIER begin_of_the_skype_highlighting 1000-
5000 end_of_the_skype_highlighting

Source: ICMR

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In February 2002, Parker launched the 'Black and White' range of Parker Vector
ball pens which were priced at Rs.145.each. In mid 2002, the company launched
the 'Football Legends World Cup edition' of Parker Vector pens in order to cash
in on the popularity that the event enjoyed. The pens had photographs of famous
football stars such as Maradona, and Pele inscribed on them. These pens were
primarily targeted at avid football fans, who would be interested in collecting pens
bearing photographs of their favorite players.

In December 2002, LWIPL launched the "Gajgamini" range of Parker Sonnet

fountain pens. The limited edition of pens (only 500 pens were released) was
named after the paintings created by noted artist MF Hussain[2] and also had his
signature inscripted on them. LWIPL priced these pens at Rs.5000 each.

DISTRIBUTING PENS

In 1999, LWIPL launched the 'Papermate' brand of pens in India. Papermate was
the largest selling brand in the US during that time. The brand strengthened the
presence of LWIPL in the low priced pen segment. These pens were primarily
targeted at the school and college students and were priced in the range of Rs 4
to Rs 13.

The specialty of this product was that they possessed the Lubrigude ink
technology, which ensured that the ink did not leak, thereby offering a
comfortable writing experience. As the Parker pens were initially targeted at the
premium segment and carried a high price tag, they were launched only in the
four metros - Delhi, Mumbai, Kolkata and Chennai. The pens were made
available in large stationary stores and point of purchase displays were attached
a lot of significance. These pens were put on display in special racks so that
people could notice the complete range of pens. As the demand of Parker pens
grew, they were made available in other urban areas of the country.

In order to increase the reach of Parker pens, the low priced versions were made
available in small stationary shops. LWIPL later opened exclusive outlets of
Parker Pens in all major cities in India. When LWIPL launched Papermate pens
in India, it changed its distribution strategy vis-a-vis that of Parker pens. The
pens were targeted at a wider cross - section of people, which included students,
executives and elderly.

Apart from relying on its existing sales force, the company tied up with Indian
Shaving Products Ltd (ISPL)[1]to distribute pens in the targeted one lakh retail
outlets in the first year of its launch. While the sales people concentrated on
traditional retail outlets such as stationary and bookstores, the tie up with ISPL
ensured that the pens were available in FMCG outlets such as shops and
supermarkets. This multi-pronged distribution strategy enhanced the reach of
Papermate pens.

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PROMOTION AND POSITIONING

LWIPL promoted its products primarily through advertising in the print and
television media. The company hired several advertising agencies in the past two
decades. The first advertising agency hired by LWIPL in the 1980s was 'Creative
Works '[2], to promote its Pilot pens. In the early 1990s, the company shifted to
another agency, RK Swamy/BBDO. In 1996, the advertising account of Parker
was awarded to McCann-Erickson[3], while the Luxor and Pilot brands remained
with RK Swamy/BBDO. However, in 1999, when Papermate was launched, the
account of all the brands in the LWIPL portfolio was shifted to McCann-Erickson.
In December 2000, the advertising account was split again. Contact
Advertising[4] was given the charge of Luxor, Pilot and Papermate brands, while
Lowe[5] was awarded the Parker brand. However, in July 2002, the advertising
account of Luxor, Pilot and Papermate brands was also shifted to Lowe. As a
result, Lowe was made responsible for advertising of all brands in LWIPL
portfolio.

The theme of advertising differed according to the product brands. For instance,
the advertising campaigns for Pilot brand stressed on the unique features of
these pens. During the 1980s, the advertising campaigns highlighted Pilot's dual
features of a ball point and fountain pen. In the 1990s, the campaigns stressed
on the technology used in making Pilot pens.

The campaign created by Contact advertising in 2002, featured the famous

television actor Shekhar Suman[1] , who highlighted Pilot's 'three dimple
technology'[2] , which helped in smooth writing. In July 2002, LWIPL felt that the
students' memory had to be refreshed with respect to the Pilot brand. An
advertising campaign, 'Pilot - Reads well, Writes well' was launched.. The
campaign was very successful and within six months, the sales of Pilot pens
increased by 30%. Explaining the advantages of Pilot pens, Pooja Jain, General
Manager, LWIPL said[3] ,

"Today, the gel fad is dying and the consumer is coming back to a more
dependable and reliable proposition for value for money, which Pilot offers. Pilot is
in fact perhaps the longest surviving and successful brand in the writing
instruments category as it writes four times more than any other needle point gel
pen. Pilot contributes 15% to our total turnover." The Parker brand received
maximum advertising support from LWIPL. Commenting on the target audience,
John Hadley, senior vice-president (sales and marketing), LWIPL said[4] ,
"Parker's target group is the top 12 million families in India and that gives us a big
market any way you look at it.

Our aim is to provide a decent writing instrument to Indians."In early 2001,

LWIPL roped in the famous film star and television icon Amitabh Bacchan to
promote the Beta and Vector brands of Parker pens. The primary reason for
choosing Amitabh as a brand ambassador was his popularity among all groups

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i.e. children as well as elders and masses as well as classes. According to media
reports, he was paid Rs 50 million for featuring in the advertisement. The ad
campaign was a huge success and had a high recall among television watchers.

In 2001, LWIPL roped in Shekhar Suman to endorse the Papermate brand. The
advertising campaign highlighted its unique selling propositions such as trouble
free writing, better quality and the rubber body of the pen, which enhanced its
grip. It also conveyed the message of romance by highlighting the two heart
shaped symbols, which formed a part of Papermate brand. Though the campaign
attracted reasonably good attention from the viewers, it was not able to generate
the kind of sales that the company expected and hence in July 2002, the
advertising contract for Papermate brand was given to Lowe. In December 2002,
an advertising campaign was aired, which featured Papermate as 'Americas
Largest Selling brand." Through this campaign, LWIPL made an attempt to retain
the American identity of the Papermate brand.

LWIPL also made efforts to change the positioning of its brand, if necessary. For
example, when Parker pens were launched, they were positioned as a premium
brand targeted at the upper sections of the society, including senior executives,
businessmen and so on.

However, realizing that young people could also be the potential buyers for
premium pens, LWIPL targeted its Vector brand at young executives and its Beta
brand for the school and college going students. Explaining the necessity to
change the positioning of the Parker brand, Sanjeev Goyle, Vice-President,
Marketing, LWIPL, said[5] , "We want the Parker brand in the pocket of every
youth. To make this happen we've a two-fold approach: one, shift Parker's
positioning from a serious, daddy's pen to a youthful and vibrant brand; and
second, give multiple price and product options to address the entire section of
the consumers

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