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Luxor Writing Instruments Private Limited - Marketing Pens in India "The mass -consumed pens are high impulse, low budget products and thus visibility is most important. Besides, there is no brand loyalty for the bottom segment." - Supratik Sengupta, Product Manager, Linc Pens and Plastics Limited 1 Introduction In 2002, Luxor Writing Instruments Private Limited (LWIPL) had emerged as the market leader in the premium pens 2 segment in India, with a market share of 60%. The company held a 10% share in the writing instruments industry, next only to the market leader, Reynolds that held 12%. LWIPL had been in the pen industry for nearly four decades. The company adopted innovative marketing strategies that had made it one of the most popular pen manufacturers in India. LWIPL offered a widest range of pens with leading brands including Luxor, Pilot, Papermate and Parker. In December 2002, LWIPL launched the world renowned 'Waterman' brand of premium pens in India. This was possible after LWIPL's acquisition of a 50% stake in the Indian operations of Newell Rubbermaid3 . The company planned to sell imported 'Waterman' pens for the next couple of years and then start indigenous production for these pens. The price of these pens ranged between Rs.3,500 to Rs.50,000 and was made available in nine sub-brands. LWIPL planned to sell these pens to corporate customers. www.jaguarpen.com

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Commenting on the prospects of the 'Waterman' brand, DK Jain, Chairman of LWIPL said, "Because of its price and brand name, Waterman will certainly have an edge over other premium brands in India."4 The company planned to launch an international advertising campaign for these pens.

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11/15/2008

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Introduction Contd... LWIPL was known for its heavy spending on advertising its products. It had entered into several tie-ups with multinational pen companies that helped in leveraging its current position in the industry. The fact that LWIPL was a debt-free company was another significant achievement. However, with the rising competition and negligible presence in the faster growing gel pens segment, analysts felt that LWIPL had an uncertain future. Analysts also feared that LWIPL's decision to diversify into the hospitality and packaged foods business in 2001-02, might lead to a loss in market share in its core business. Background Note The pens industry in India had passed through various phases with the changing tastes and preferences of customers. Till the late 1970s, only two categories of pens existed in the Indian market – fountain and ball point pens.

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During that time, people preferred writing through a pencil rather than a pen. Moreover, people preferred fountain pens, as it was perceived to write better compared to the ball point pens. Apart from domestic manufacturers, who manufactured fountain pens on a small scale and sold them at cheaper rates, branded fountain pens manufactured by leading international players such as Monte Blanc, Cartier and Parker were available in India through the grey market.

However, owing to their high prices, not many people could afford to buy them. Camlin Limited was among the noted fountain pen makers in India during that time. By the late 1970s, fountain pens started loosing their popularity as people found it cumbersome to refill the ink regularly. The 1980s witnessed an increased acceptance of ball point pens and Wilson Jotter was considered to be the market leader in this segment. The pens manufactured by Jotter were popularly called Jotter pens. The market for ball point pens was also dominated by domestic players in the unorganized market. With the increase in demand, existing players started expanding their capacities while many new players began entering the market. In 1982, Deepak Jain, managing director of Luxor Pen Company (Luxor) entered into an agreement with the Pilot Corporation of Japan to officially launch Pilot pens in India. In 1984, Suraj Mal Jain 5 started a manufacturing unit for ball point pens and refills in Kolkata and named it as Linc Writing Aids Private Limited. The company launched new varieties such as disposable pens into the market. Luxor Writing Instruments Private Limited - Marketing Pens in India - Next Page >>>

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11/15/2008

Luxor Writing Instruments Private Limited - Marketing Pens in India | Background Note

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Background Note Contd... In 1986, the French pen company, Reynolds entered the Indian market through its subsidiary, GM Pens International Limited by setting up a manufacturing plant at Chennai. It used the latest technology to make pens and refills of better quality and offered them at an affordable price. The Reynolds 045 pens became very popular among the regular pen users; especially among the school and college students. Until the late 1980s, not much importance was given to the promotion of pens and there were very few recognized brands in the market. Companies did not consider it worthwhile to invest large amounts of money on promotional activities. The focus was more on pricing and distribution. Pens were manufactured in large volumes, and were priced competitively. By 1990, 90% of the market share in India was held by unorganized players. In the late 1990s, the pen industry witnessed several developments. The varieties of pens available in the market increased significantly. The

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new range of pens introduced included Fibre Tip Pens 6, Gel Pens7 , Roller Pens8 and Marker Pens9 . A marked change was also noticed in the attitude of people, and they became increasingly brand conscious. By early 2002, some of the most popular brands in the Indian pen market comprised of domestic brands such as Reynolds, Luxor, Cello, Rotomac, Kores, Today's, Montex and Add pens and foreign brands such as Mont Blanc, Flair (with Pierre Cardin), Uniball and more.

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