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Friday, January 6, 2012

The Parker Pen Company

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1.1 Executive Summary


The reason for studying and giving recommendations and findings for he Parker Pen case study is for me to further develop my international marketing skills and to practice my knowledge of understanding and solving problem cases.


My finding in this case study is that Parker Pen Company was not necessarily driven by the wrong man, but by the wrong strategy. Global marketing strategy was implemented, but with no luck. It led to conflicts and dissatisfied employees. This does not mean that global marketing is a bad strategy overall. It simply means that it was not the right one for the Parker Pen Company. I suggest that Parker Pen should use a multinational marketing approach by using different local marketing companies for the different types of markets. Use a French marketing company for the French market because they know that segment best. Use an Italian marketing firm for the Italian market etc. 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 $.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.


Cheap Custom Essays on The Parker Pen Company




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.


.1 Case Background





Parker Pen Company, the manufacturer of writing instruments, is one of the world¡¦s best-known companies in its field. James R. Peterson became the CEO of Parker Pen company in January 18. At that time, the company was struggling. He decided to launch a global marketing campaign. Everything was to be standardized.


His global marketing approach soon seemed evident that it gave bad results.


Peterson removed all marketing firms they had currently been employing, and hired Ogilvy & Mather to have sole control of the marketing. When they were terminated, the immediate impact was expressed bitterness and the decrease of employee morale in the firm. The board of directors also turned against the concept of globalization.


The subsidiaries and distributors of Parker Pen fought against the idea that the markets for pens where the same everywhere. This led to different conflicts inside the organisation about standardization of efforts.


Decision was made to aggressively go after the low end of the market although their image was based on high end of markets. Parker Pen started concentrated on low-priced, mass distributed products. Dilution of their image and economic losses of $ million in 185.


4.1 Problems / Issues


The view of global marketing by Mr. Peterson and Parker Pen Company is too narrow.


The dilution of the Parker Pen image by entering into low-end markets.


Standardization of marketing efforts led to conflicts.


Decrease in employee morale and expressed bitterness.


5.1 Problem Analysis and Justification


The biggest underlying problem is the globalization strategy that is implemented through the new CEO, Mr. Peterson. The merits of global marketing should never be judged according to the Parker Pen case. Global marketing changes from situation to situation, and what Mr. Peterson did not realize is that there are different views of what globalization is and how it should be implemented. Mr. Peterson has previously worked at R.J Reynolds and has developed from there an opinion about what global marketing is. He wanted for Parker Pen writing instruments nothing less than to be equivalent of the Marlboro Man. Using this approach through global marketing suggests that the markets for Parker Pen writing instruments are the same everywhere, as they are for Marlboro smokes. Are they really??? The tobacco industry is something totally different than the pen industry. Marketing is about understanding exactly what the consumer would like, not giving the consumer what he says he wants (Levitt 18, p. 7). If we relate this to the Parker Pen case, we can see that the subsidiaries claim there is different wants and needs for pens in different countries.


This is something that should not be disregarded. The tobacco industry might get away with 100 % standardized products and marketing, but in the Parker Pen case, it is evident that this approach did not work.


Parker Pen Company was imaged in the high-end pen market. Parker Pen had started to aggressively enter the low-end pen market. They produced low-priced, mass distribution products in the US which caused dilution problems to the current parker Pen image. Image can be everything. This is not something to work across and dilute. In the end, this is why consumers buy the Parker pens, because their image attracts the consumers. It ultimately resulted in a $ million loss in 185.


Through the Group Marketing, Parker Pen Company began to centralize and standardize the marketing efforts for Parker Pens. Their idea of selling pens the same way everywhere did not sit well with many Parker subsidiaries and distributors. They believed that pens where indeed the same, but markets, they were different France and Italy fancied expensive fountain pens; Scandinavia was a ballpoint market. In some markets, Parker could assume that they liked more expensive pens, in others Parker had to go in and compete on price. But headquarters ignored this. Ogilvy and Mather fought against this, but eventually had to do as the headquarters said.


Under the administration by Mr. Peterson, Parker Pen Company terminated all the marketing firms, and gave sole control to Ogilvy & Mather for their marketing jobs.


Previous marketing had been very successful through the London based firm Lowe Howard-Spink. When they were terminated it immediately created a decrease in employee morale and expressed bitterness from the subsidiaries. When employees feel that the framework of their organization is taken away without any explanation, the result will be low morale employees questioning the skills of the management.


6.1 Alternative solutions


1. Parker Pen company can choose and implement a International Marketing strategy in order to solve much of their global marketing issues explained earlier.


. They can continue to have a standardized and centralized production and distribution since they have already invested large sums of money in their production plant.


. They can start seriously targeting low-end market pens in order to win more market share, but this will dilute their current and historic image more.


4. They can choose to totally change their image and get into the market for cheap low-end pens if they believe that this is the way the markets are heading.


7.1 Recommendations


Buzzell (168, p.10) stated that ¡¥the prevailing view is that marketing strategy is a local problem. The best strategy will differ from country to country, and the design of the strategy should be left to local management in each country.¡¦


I think Parker pen should use a multinational marketing approach by using different local marketing companies for the different types of markets. Use a French marketing company for the French market because they know that segment best. Use an Italian marketing firm for the Italian market etc. 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 $.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 $.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 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.


8.1 Bibliography


„X Czinkota, M.R. and Ronkainen, I.A. 18, International Marketing, 5th edition, Dryden Press, Fort Worth.


„X Levitt, 18, ¡¥The globalization of markets¡¦ Harvard Business Review, May/June.


„X Buzzell, R.D. 168, Can you standardize multinational marketing¡¦, Harvard Business Review, November/December, pp.164-174.


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