Parker Pen is a preferred writing instrument for older generations. Its quality and craftsmanship are unquestionable to many “patrons” who are mostly identifiable to afford a luxury such as Parker Pen.
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Parker Pen launched a globalization approach in the 1980s that sent its reputation and sales backward. Globalization is an economic process in practice ever since the buy and sell of goods and services brought Europeans to a variety of unusual and never-known lands in the East. It evolved to be adopted by Western entrepreneurs who soon found bigger markets for products that are sourced elsewhere with the potential to gain more profits.
At present, globalization is defined by the current information and communication technologies — a fast-shifting phase that has developed rapidly to its present condition where one aim of spending can be openly influenced from a new endpoint of developing or creating, in a matter of seconds. For worldwide products that have benefited from established positions prior to the onset of ICT, they are now regarded as on the front liners in global marketing. These products, items, or services also have the edge if they have recognized worldwide existence and representation that speaks of superiority and dependability such as that of Parker Pen.
This paper will assess the Parker Pen Company’s marketing miscalculations, its relations to globalization, as well as the company’s impact on global marketing circa the 1980s when it lost some $200 million due to marketing failures.
Parker Pen is a global product name for the best pens that are sold in 154 countries. While headquartered in Janesville, Wisconsin, the attainment of fame or position depend mainly on its sales overseas. James Peterson from R.J. Reynolds turns into president and CEO. The dollar which increased worth in the 1980s had the incomes of Parker dive so that Parker cut the payroll, decreased the product line from 500 to just 100, strengthen the manufacturing process, and refurbish the manufacturing plant with new technologies. Many subsidiaries were greatly affected, with Lowe Howard-Spink in London known to have produced the finest advertisements for Parker Pen’s most lucrative subsidiary company losing stance against Ogilvy and Mather which was allocated an exclusive advertising contract.
Parker Pens targeted the other segments of the market as Bic and other Japanese pen brands conquer global mass markets. It launched Premier for the high-end market but used it mainly for positioning. Vector the rollerball pen priced $2.98 was also introduced with the expectation that it will fetch in the largest returns and designed the disposable Itala, the low-priced of them all. With these tactics were three new administrators for the Group marketing: Richard Swart from 3M’s image advertising turn into vice president for writing instruments, Jack Marks from Gillette became head of writing instruments publicity, and Carlos Del Nero from Fisher-Price who became manager of global marketing planning.
A general artistic strategy and positioning were implemented, using the “Make Your Mark With Parker” of consistent graphic lay-out, type-face, Parker logo with all materials centrally provided. The new plant, on the other hand, not only broke down constantly but also turned out imperfect products that lead to high manufacturing expenses. The sophisticated and cheapest markets became puzzled at the marketing communication and resulted in a loss of about $22 million by 1985.
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Already, there were a lot of obvious mistakes taken by the new group of Parker Pen directors. Parker Pen management and their advertising group overhauled an operational production plant, neglected the product image that is long-established, provided indistinct marketing communications, as well as ignored globalization trends and demands.
Branding is a marketing concept that provides an image to a product. The business firm was earlier showed to have recognized the historical relevance of the product image for a defined sophisticated market. This has been damaged by the notion of a worldwide marketing movement of the “one sight, one sound, one sell” motto.
Product development is stressed in branding. Advantages found from the product or the product qualities are highlighted to strongly impact consumers. Brand loyalty is determined by outstanding product attributes that help shape the purchase decisions of consumers. Parker Pen should have sustained dominance over its rivals Cross or Montblanc and should have addressed this problem together with other issues with the proper branding and marketing strategies. Shavitt and Nelson (1999) recommended that apart from practical purposes, products such as high-end pens like Parker also speak the uniqueness of their owners. According to Dubois and Duquesque, a number of luxury products have been observed to be acquired by consumers due to their high cost (Dubois and Duquesne, 1993, 38).
Apparently, luxurious and popular brands increase one’s social position and provide a chance for owners to reach levels of wealth. Likewise, it was also stressed that producing a high stage of brand consciousness, characteristics, and constructive brand descriptions affect the success of products and brand value. Product names have a responsibility in generating brand images that offer signs about product quality, value, influence, and excellence. It impacts a recall which is significant in customer assessment of a product when they are about to purchase (Krishnan (1996) in department stores. Parker Pen has recognized excellence in workmanship and writing quality prior to its market breakdown. The value of its branding was eroded by its own middle and lower-end goods such as Vector, or others like Itala. While the good image of Parker Pen could have influenced the buying decisions of the middle and lower-end markets, the marketing campaign of “Make your Mark with Parker” provided a doubtful image to its loyal customers. The poor quality churched out by its “state-of-the-art” plant also helped lower its sales and status.
The fast-selling Bic, Pentel, Pilot, and PaperMate lured Parker Pens to produce Itala or even Vector, the roller ballpoint pen. It obviously aimed at several market segments but it failed to reconsider its marketing mix strategies. Parke Pen executive became blinded by the stubborn notion of the “one sight, one sound, one sell” concept. As Copp (1989) noted, ”use one umbrella product position, one overall advertising message, and one promotion to appeal to everyone in the target audience…[is the same as] saying something to everyone which has little relevance or motivation to anyone,” (p 21). This meant that one market segment may find the marketing campaign totally irrelevant to his needs to buy quality pens at a lower price. Likewise, its high-end consumers used to buying quality pens at high cost became confused with the new labels Vector which is also being promoted in the campaign.
Kotler (2001, 65) suggested that market segmentation identifies a portion of the market. It then recognizes intended markets in order to determine the marketing mix to be used for every target segment. In the process of market segmentation, the firms satisfy customers’ needs, and the seller develops profiles of the various segments to maintain an edge over competition in a continuing process. Parker Pens adopted mass marketing of which it treated all its customers in the same strategy or marketing mix. There is mass production, mass distribution as well as mass communication and advertising without consideration of the customer preferences and needs. In identifying its various segments, the activities of Parker Pens consumers should have been evaluated and introduced with certain marketing strategies adopted for each segment. Each segment will be identified and developed for the segment positioning concepts will follow to convince consumers of their relevance in the product development (Doyle, 2009, p 12).
Under marketing planning, each segment will have a marketing mix most appropriate for the segment consumer that makes the “one sight, one sound, one sell” approach irrelevant. Levi’s and Coca-Cola seemed to have been the pattern of Parker Pen in its globalization campaign. However, it is also noted that the management teams came from mass-market products. RJ Reynolds manufactured tobacco products, 3M advertising that produced office and stationery products, the Silkience hair-care products of Gillette also targeted mass consumption, and Del Nero marketed children’s products such as toys, also aimed at mass consumption. The question has been whether any of them was familiar with marketing a luxury brand like Parker Pen. While Parker Pens aimed at a bigger international market, it did not intend to dispose of its established Parker name and image recognized globally for quality and craftsmanship.
In this instance, Parker Pen had at least three market segments.
Kotler (2001) proposed that a market segment should be measurable, accessible, has a unique response to a marketing mix, consistent and does not change easily, as well as sustainable and profitable. Every consumer has his or her own individual needs to satisfy, preferences, resources, as well as behavior which should be carefully considered. Market segmentation help marketers:
- Detect market opportunities
- Adjust product and selling strategies
- Develop programs and budgets with a clearer understanding of the specific market segment (Kotler, 1997).
There are several factors that are considered in Market Segmentation, and these include:
- Geographic – based on neighborhood, location, region, climate, and population
- Demographic-based on age, gender, social standing, ethnicity, nationality, education, occupation, family size and orientation, and income.
- Psychographic – uses values, activities, attitudes, lifestyle, interests, and beliefs.
- Behavioral – use variables such as rate or patterns, price, brand loyalty, occasion, and product attributes (Kotler, 2001).
In addition, even international marketing or Globalization adopts segmentation and this involves organizing and managing groups of consumers. Certain factors are considered on luxury products base on economic criteria, seasonal or perishable products. In turn, the marketing mix for high-end products such as Parker Pen is geographic criteria, and products to cater to individual tastes are aligned with cultural criteria.
Parker Pen was already a brand name to reckon with even before the war. It is already known as quality writing to establish a global brand prior to the 1980s. It was considered either top or number two was its 51 label was able to generate $400 million, a record in history. It enjoyed high-end consumption in the 1960s to 1970s but its use of a single approach to marketing blurred the distinction of several Parker products aimed at various segments. This caused confusion among buyers. Its globalization approach was noble, but its marketing strategy, a failure.
Globalization is the merging of markets, work environments, and mixed sourcing for an international exchange of goods, services and other life factors. A provider or producer from one location provides a consumer to a very far location his products and services in the speediest manner available. There is a blurring of national boundaries removing limits in the exchange and trade process. International marketing and Globalization is an extension of marketing principles and marketing mix outside the source country to adapting localized versions of these strategies to increase profits.
Today, global consumerism has decreased individual differences of consumers. Marketers now focus on similarities of individuals around the world as micro-segmentation and micro-segmentation were adopted (Frear, Alguire, and Metcaf, 1995). It is proposed that macro segmentation divides national markets and involves characteristics about the market itself instead of the individual consumer. Firms choose countries that they believe would churn out minimal risk, meet objectives and accept product offerings from international manufacturers. Some markets are also identified as innovators or countries that easily and readily accept new products introduced in the market. others are called non-innovators which reject or disregard new offers (Lee, 1990, 43).
All these factors are important considerations in the global marketing strategy for Parker Pen.
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In the process of adopting a global selling approach, Parker Pens should have been best advised to adopt internationalization defined as the extent to which market and operational scope is globalized (Madsen, 2005). Its potential benefits include volume economies, market intelligence, product development, and operational flexibility and stability. Recently, the trend to internationalization is the use of the strategic location of product development organizations and manufacturing facilities around the world. Here, the basic life-product cycle is adopted with its three cycles:
- development of new products
- extension of new markets outside the national borders
- mass production and marketing in cheaper labor markets (Vernon, 1986).
This has been heavily adopted today as cheap labor outsourcing havens like China and India provided a location for mass production. In trying to maintain its global position, Parker Pens could have adopted ways to lessen its manufacturing costs as well as to adapt to the needs of its widening market with all its segments: high-end, middle, and lower-end segments highly considered.
Internationalization entails that firms increase their involvement in international product development and manufacturing operations instead of using large-scale moves such as that adopted by Parker Pens in centralizing most of its production, operations, and marketing strategies. The internationalization of firms provides effective product development and placement as well as dispersing product development around the world. Cantwell (1995) further suggested that management can then focus on how to effectively integrate product development activities, organizational processes, and technological capabilities. With the notion that consumers around the world are in essence similar, the global-consumer notion is accepted.
Non-domestic segmentation activities are in a place identical to the ones used in domestic markets by organizing markets using demographic, geographic, socioeconomic as well as individual lifestyle characteristics (Luqmani, Yavas, and Quraeshi, 1994). Consumptive objectives and behaviors are the operational criteria used for this grouping of individual consumers. In fact, it was suggested that a globally integrated approach to markets cannot eradicate all consumer differences as these are influenced by language, culture, geographic locations, and constraints of consumption experience (Horn and Shy, 1996). It is further suggested that since marketing activities’ objectives are to facilitate exchange, non-domestic operations should be directed at consumers’ characteristics instead of the country’s characteristics. Global convergence will be brought closer to light when it comes to individual consumption as norms and culture influence buying decisions (Kale, 987).
Parker Pen failed to address at least three major issues of organizational existence relevance: cost-effective production, marketing strategies, and brand image. These are all integral in the existence of a firm and need not be addressed by whim and fancy.
Parker Pens aimed at globalization and a bigger market, so it should have banked on its established brand name, reputation, and image.
In the globalization process, every country with potential markets for Parker Pens should have been carefully studied and surveyed in order to identify whether it is an innovator or non-innovator. Macro segmentation should have also been adopted to address differentiations so that countries without potential should have been taken off the priority list in order to cut expenses and losses.
Consumers are unique in their search for product satisfaction. Market segmentation in a globalized market will have to offer varieties and choices to different individuals using distinct marketing communication strategies. Usually, individuals are grouped together but still, the marketing mix adopts strategies that appeal to one group and do not appeal to another.
Cost-effective operations should also have been another priority for Parker Pen as in maintained product quality and reliability. By overhauling a plant, which should have been considered an asset in the first place, it risked production and manufacturing processes without the guarantee of quality turn-out. Parker destroyed its own brand image established prior to the 1980 catastrophe. The focus should have been on maintaining a brand image as it developed other marketing approaches to gaining middle and low-end consumers.
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