RIZAL TECHNOLOGICAL UNIVERSITY

“PARKER PEN COMPANY”

CASE STUDY ANALYSIS

Submitted by:
Sherren Marie F. Nala

December 10 , 2019
Prof. Catherine Tria
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TABLE OF CONTENTS

I.Time Frame

II.Perspective

 Top Management

 Consultant

III.Statement Of the Problem

IV.Objectives

V.Areas of Consideration

 Swot Analysis

 Computations

VI.Alternative Courses of Action (ACA)

VII.Recommendation

VIII.Action Plan
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I. TIME FRAME

1888 – The Parker Pen Company was born.

1889 – George Parker patents his first fountain pen
1894 – Lucky Curve feed system becomes a breakthrough
1899 – Parker launches the first joint less hard rubber pen

George Parker was the founder of the Pen Parker Company in 1888. In the
year 1889, he got hit first patent for a fountain pen. Five years later he also received a
patent for his “Lucky Curve” feed, and that patent was used up until 1928. His pen
factory was the biggest pen factory in the world by 1908 and created one of the biggest
pen brands in the world. That factory was located on Main Street in Janesville,
Wisconsin.

In the period between 1920 and 1960, before Parker developed the ballpoint
pen he remained one of the largest writing instruments manufacturers. His pen named
Quink or quick drying ink was created in 1931, and it eliminated the need for blotting.
Ten years later the Parker Company created one of the most famous and the most
widely used model of a fountain pen in history, the Parker 51. Parker 51 was sold in
more of $400 million worth through its thirty years of history. His brand was one of the
first brands that had a presence worldwide.

In January 1982, James R. Peterson became the president and CEO of Parker
Pen. At that time, the company was struggling, and global marketing was one of the
key measures to be used to revive the company. While at R.J. Reynolds, Peterson had
been impressed with the industry’s success with globalization. He wanted for Parker
Pen nothing-less than the writing-instrument equivalent of the Marlboro man.

In early 1984, the company launched a global marketing campaign in which

everything was to have “one look, one voice,” and with all planning to take place at
headquarters. Everything connected with the selling effort was to be standardized. This
was a grand experiment of widely debated concept. A number of international
companies were eager to learn from Parker’s experiences.
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II. PERSPECTIVE

Top Management
Mr. James R. Peterson During the crisis of Parker pen, there were many roles
being played. Mr. Peterson worked at reducing costs by laying off employees to
reducing the product line to 100. He believed that entering into the global industry.
James R. Peterson became the PARKER’s Chief Executive Officer in – 1982.
Paterson centralized and standardized the advertising efforts of PARKER along with
packaging, pricing, promotional materials, though it had the record of remarkable
successful advertisement campaign on decentralized approach. Many subsidiaries and
distributors protested the policy of “One World, One Brand and One Advertisement”,
arguing that advertisement should be developed with the needs of local marketers
mind. But Paterson move ahead with his plan, promoting one worldwide advertising
theme for PARKER “Make Your Mark with a PARKER”. Peterson and his team
further surprised all, by deciding to vigorously pursue the lower end of the market by
giving up the traditional image of company (traditional seller of the upper end
products). This gentleman drew up “The Janesville Strategy”- Lower priced pens were
to be produced in volume at Parker’s new and fully automated plant. With all these
new arrangement the company started its journey but had to face immediate set back,
once the newly established plant come out with production difficulties due to
mechanical disorder. This set back further enhanced, once Peterson’s “One Look”
advertisement hit the wall and crashed. Paterson and his team’s misery continue as the
strategy of producing low-cost pen proved to an ill-advice because it ran counter to
PARKER’s tradition and image. With all these difficulties the company reached a
crisis point and had to go back to their traditional decentralized approach with the
change of CEO The principal problem wrong selection of marketing strategy by the
new CEO of PARKER (Mr. Paterson) was the principal problem of this case. There
are a number of subsidiary problems associated with this. Once Mr. Peterson took over
as CEO in 1982, company was just fine with their marketing activity, considered to be
the one of the world’s best – known brands. At that period the company had been
operating as per the guidance of their remarkably successful multi domestic and
decentralized marketing strategy. This strategy was associated with successful
decentralized advertisement campaign, which had been managing by 40 different
advertising agencies around the world. Beside this at that period PARKER also had
the established image “traditional seller of high end products”. But Mr. Paterson tried
to ignore all these and decided to change the culture of PARKER by altering the
decentralized marketing approach to centralized approach. Though it is the logical
development of international marketing involvement, but in no way we can ignore the
tradition and culture of a company. Beside this any marketing decision has to be
supported by the market survey. The requirement of the market has to be reflected in
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all marketing decision. But in case of PARKER, as the new CEO was staunch
advocate of “Unified Global Marketing Approach”, took the decision of changing the
company’s marketing approach without considering the market requirement. Many of
its subsidiaries and agents had been protesting this decision and immediately after the
implementation of this strategy proved to be a suicidal decision for PARKER.
Followings are the subsidiary problems which enhanced the wrong decision making of
Mr. Paterson and also caused his strategy a total failure

Consultant
 Richard Swart, who became marketing vice president for writing instruments, had
handled 3 M’s image advertising worldwide and taught company managers the ins and
outs of marketing planning.
Swart insisted that the directives were to be used only as “starting points.” and that
they allowed for ample local flexibility. The subsidiaries perceived them differently.
The U.K. subsidiary, especially, fought the scheme all the way. Ogilvy & Mather
London strongly opposed the “one world, one brand, one advertisement” dictum.
Conflict arose, with Swart allegedly shouting at one of the meetings: “Yours is not to
reason why; yours is to implement.” Local flexibility in advertising was out of the
question.
 Jack Marks became head of writing instruments advertising. At Gillette he had
orchestrated the worldwide marketing of Silklence hair-care products.
 Carlos Del Nero, brought in to be Parker’s manager of global-marketing planning,
had broad international experience at Fisher-Price. The concept of marketing by
centralized direction was approved.
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III. STATEMENT OF THE PROBLEM

Parker Pen Company faced some difficult years where they were not obtaining as much
revenues as expected. Therefore the company hired a new board of marketing directors
seeking the implementation of new strategies for the company. The new board, which
consisted of highly qualified people, began their campaign by standardizing the products
in a centralized system. This centralized system consists of abolishing plurality in the
decision-making. The new system they adopted which a worldwide strategy was caused
the company more than $20 million in losses. Marketers didn’t investigate therefore
gave the company a negative image in the market.

The globalization process in the Parker pen company was a failure until major structural
changes were implemented by James R. Peterson. Basic rules of globalization for any
company state that an extensive research of the potential market has to be done, and very
thoroughly. investigating the market conditions in not enough, political, legal, social and
cultural aspect have to be at the top of the list to ensure that the strategies will be
effective and that consumers will respond positively to the strategies implemented. This
was one of the things that Parker pens failed to do, they just relied on a weak currency
that allowed foreign markets to purchase American-made products, and this would only
last until the U.S. dollar lost its acquisitive value.

The problem that Parker pen had in its globalization process was spawned form
miscalculations or lack of vision in very key areas. The first thing which globalization
promoters at the Parker Company underestimated was the strength and impact of the
changing market. They never considered that economic and political conditions would
vary in such a way that their overseas operations would collapse in such a way. They
relied on a very strong dollar which made it easy for foreign customers to purchase their
products, making this their most important income source. By overlooking this
important event they drove themselves into an awkward position where they had low
sales internally and over autonomous subsidiaries with a large stock and no market share
at all.

IV. OBJECTIVES

 To enhance sales gradually but repair the brand image and net equity in the long term.
 To focus its efforts again on selling the upper end products in their generic brand name
PARKER to keep up the tradition and image of the company at historically targeted
market segments
 To focus on a common positioning, this meant that the same types of pens would be
allocated to its specified locations.
 To reduces the level of customization and personal preference.
 To get out of the low-end market because that will only dilute their image.
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V. AREAS OF CONSIDERATION

SWOT Analysis
Strengths
 Traditionally with a well-known, high quality brand
 Different pen tips (fountain, ballpoint) of products
 Sophisticated packaging and display case of pens
 Smooth writing of parker pens
 Innovative design

Weakness
 Expensive for certain demographics
 Abandoned the high-end market
 Enter into the low-end market
 Lack of new designs and innovations
 Danger of losing brand appeal

Opportunities
 New
 Revolutionary product in a new market
 By continually introducing new products, expanding the target base, Parker can
reposition itself
 Writing Instruments Market is expanding as many foreign companies are coming in
this.

Threat
 Cheaper
 Similar products
 Less promotions
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VI. ALTERNATIVE COURSES OF ACTION (ACA)
Alternative Courses of Action
(ACA)
Parker Pen company can choose
and implement an International
Marketing strategy.
The Company can continue to
have a standardized and
centralized production and
distribution since they have
already invested large sums of
money in their production plant.
The Parker pen company can
start seriously targeting low-end
market pens.
They can also choose to totally
change their image and get into
the market for cheap low-end
pens.
Advantages Disadvantages
They can solve much of Launching a marketing
their global marketing campaign on your
issues in their company. website can also be
An all-encompassing expensive, especially if
marketing strategy will you’re using a pay-per-
keep you relevant in all click strategy to attract
the mediums your more prospects.
customers engage. Television and radio
advertising spots are
also costly, and even
local advertising space
is at a premium.
Centralized The cost of labor can
manufacturing can also also be a disadvantage,
enable better especially if a company
forecasting, more local maintains its central
jobs, consistent plant in a region or
production and more country where wages
effective use of limited are rising.
resources. Standardized
production can
rationalize different
varieties of products.
They will win more But this will dilute their
market share. current and historic
image more.
If they believe that this People can become
is the way the markets easily confused or
are heading. Your frustrated whenever
company personality or change occurs. Be
your target audience you prepared to spend
can attract new money on developing a
customers and rekindle creative rebranding
an interest from your strategy, new content,
existing audience. graphic design, as well
as marketing and
advertising campaigns
to support your project.
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VII. RECOMMENDATION

The best strategy will differ from country to country, and the design of the
strategy should be left to local management in each country.
For me I think Parker pen Company should use a multinational marketing approach by
using different local marketing companies for the different types of markets. By using a
French marketing company for the French market because they know that segment best.
Use an Italian marketing firm for the Italian market etc. And I believe they should still
centralize and standardize production and distribution operations in order to be cost
saving.
Parker Pen Company should continue to image their product as they are known
for. This is high-end pens of quality from $3.00 and up. Image is everything. They
should get out of the low-end market because that will only dilute their image. Then they
should reinvest in R & D and continue marketing strong towards their high-end markets
so that their brand image becomes stronger than before.
They should concentrate their efforts on the $3.00 up markets.
The standardization of marketing efforts was a bad mistake. Parker Pen
Company needs to get a different view on how marketing should be handled. As
mentioned earlier, they need to localize marketing efforts where needed. In addition they
should hire back the old marketing firm Lowe Howard-Spink from London to do some
of their work.
This is because they had a lot of success with them in the past and because hiring
them back might boost the morale of the employees. The morale of the employees can
again be re-established by giving the employees the opportunity to give input and
suggestions on new and existing products in order to increase employee morale.
My suggestions are Parker Pen Company should use a Coca Cola model of
standardization. The core product will be the same but the augmented one will contain
some adaptation. In the case of Parker standardization should be used for the distribution
network, the suppliers and the production. The company must not ignore that people are
different and have different tastes even in pens. This means that Parker’s products
should be adapted according to the local preferences. In other words, Chinese people
would prefer more fancy pens, whereas Scandinavians would look for an ordinary one.
Every decision should be taken by the top management team which will coordinate
every issue occurring in the company. Another example in the promotion is that colors
that will be used in the printed advertisements should not the same everywhere. For
instance, Japanese people do not prefer white, whereas in Europeans do like it and find it
attractive and elegant so it could be useful for advertisements.
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VIII. ACTION PLAN

Task Person Responsibilities Time Implementation

Standardization model Operation Manager 2 month
through some
adaptation in the
products, the ways of
selling and the
promotion
Lower End Market Vice President 1 month
Product may be
developed with Different
Brand Name
Re-switching over to the Marketing Manager 2 week
previous decentralized
marketing approach
Rebuilding the lost CEO 5 month
image of a company