Clique Pens:

The Writing Implements Division of

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CASE STUDY SOLUTION
PRESENTD BY GROUP 8:
ABHIJIT CHOUDHURY- PGP04001

ANKUR KEHSARI- PGP04013

ASHISH NAGRALE- PGP0417

NISHANT GHUGE- PGP04028

HARSHIT SINGHSHISODIA- PGP04032

RUSHIKESH CHAUHAN-PGP04073
History of Pens: Fountain, ballpoint

 First practical fountain pen invented by Louis Waterman-1875

 Shift in ballpoint pens in US in late 1950s.
 Formation of Waterman-BIC Pen Company in 1958 after acquisition.
 Mechanical Pencils:1822
 Modern mechanical pencil-1915 by two inventors: led to formation
of Sharp Electronics Corporation and ever sharp pencils by Charles
Keeren.
History of Clique Pens

 Formed in 1922 by two Mennonite cousins in Kansas City, Missouri.

 Originally made fountain pens but quickly adopted to the ballpoint
pen trend.
 Known for their utilitarian designs reflecting core values, “always
ready ink” supply.
 Ink formula was its secret.
 Utley acquired it in 1980.
 Sales around $17 million and sold worldwide.
Industry Analysis
Substitutes-
Very high as
very less
product
differentiation

Industry Rivalry- Bargaining power

Bargaining Power very high, of buyers:
of Supplier: competing on Moderate to high,
Low, raw materials offering more trade
have a fixed price
prices and
discounts to
in the industry trade discounts
acquire shelf
space

Threat of new
Entrants:
Very Low, as
already the
market saturated
with many players
Problem Statement

 Allocation of fund for Marketing and Sales to increase the profits for
Clique.
 Stop decline in gross profit margin percentage and grow overall
gross profit by 4%

Logan Ross Elise

Chen MacMillan Fergusson
Marketing Sales President
VP VP
Analysis

 15,30,55 % distribution strategy, similar with the competitors.

 Marketing of product also involved their Retailers: e.g. – “available
at target”
Marketing and promotion
 The distributors and retailers are the key components in the
distribution channel and selling of the product. Advertisin
g
 Fergusson had data for deals with buyers- 80%
 Essential for gaining shelf space. 15%
Consume
r
Promotio
55% 30% n
Trade
Promotio
ns
Analysis

 Industry did not have any firm with brand to market share power.
 Consumer Behaviour: Did not shopped around even if the brand of
choice was not available when the thought of buying pens or
pencils occurred to them.
 Chen: use MDF to buy more co-op advertising and consumer
discounts such as ‘instant coupons’.
 Chen: Has data which shoes customer are not price-sensitive.
 Fergusson: Supporting the brand is of extreme importance.
Solution

• Increase in trade allowances have decreased the profit margin.

• Decrease in advertising has not resulted in loss of sales.

• One Solution:
Increase the price by 6% which would result in only 1% sales
reduction keeping the retailer margin same
(Market is price insensitive)
Retailer Mode: Staple

 Buyer at Staple get a heavy bonus weighted to his realized gross

margin so discounts off our wholesale are extremely important.
 Current Discounts:
volume allowance: 5.5% Marketing MDF?
-Yes
Warehouse allowance: 3%
Expand market, increase
Stocking fee: 1.5% sales volume
Wholesale price: $0.94 Sales MDF?
Cost: $.46 -Yes
Discount offered
Retailer Mode: Walmart

 Walmart already have a great image

 Lives on set margin

Marketing MDF?
-No

Sales MDF?
-Yes
Walmart needs profit, we
provide discounts
Retailer Mode: Walgreens

 The buyer at Walgreen has a bonus with a component that rewards

dating and payment discounts.

 They care about discounts so sales MDF Marketing MDF?

-No
Is necessary.
Sales MDF?
-Yes
Thank You!