Parker Pen: An Adventure in Globalization pg. 547 1. -This is the history of the failure of an international marketing strategy. Which were the reasons? Analyze the 4 P’s. (Price, Product, Place, Promotion) Being one of the largest pen industries in the world, Parker Pen was a failure for having international marketing strategy. This is due to the fact that Parker wanted its products to fall under the concept of standardization. He called this the “Janesville strategy”.
Under promotion, Parker Pen wanted his pens to follow the mission of “one look, one voice”, meaning all Parker products would be sold and re-produced the same way in all countries the company would make partnership with overseas. As a result, all packaging and advertising would mirror the original Parker Pens in all participating countries. The problems which would arise from this is that standardization may not cater to different countries, who may have an interest for specific supply of pens. For example, locations such as France and Italy are fond of expensive fountain pens.
Consequently, promotion strategies would lead to the decisions with regards to the distribution of products. Parker wanted all his pens to focus on a common positioning, which meant that the same types of pens would be allocated to its specified locations. The problem here is that the target markets values and interests are different across different markets, and cannot be dealt with similarly. Parker failed to realize that that you cannot use the same tactics on all individuals because each individual is unique in their own way. On the same note, this reduces the level of customization and personal preference.
This also reduces customer consideration and individuals do not feel there is a sense of providing customer satisfaction. For the product, Parker pens lose its value in the pen industry for providing individuals with the writing instruments they need and have a value in. The Janesville strategy was a failure also due to the fact of pricing barriers. As stated in the article, Parker produced low-cost pens, which were not functional and were unable to do what they were intended to do. Leading up to this was a large controversy on the goodwill of the company in comparison to their actual products.
Parker pen was a known as a company of quality, yet with this new global strategy, they failed to reduce costs yet at the same time satisfy the needs of customers. 2. -What role do people play in implementing any strategic decision? Analyze the role of Mr. Peterson, Mr. Smith and Mr. Parker. 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, it would require a single “world class agency”. Both Mr. Peterson and Mr.
Smith decided that Parker pens needed to target the low-end of the market, meaning low cost pens would need to be produced. This would also result in the pens being in lower quality and standards than the original Parker pens. Mr. Smith, being promoted as the new president of the Parker pen company, planned to develop the Vector on the high scale and a disposable pen named the Itala on the low scale. Mr. Smith wanted Parker pens to take on markets of the pen industry that has never been done by any other company before. He decided that this would be the success of the company in entering into the global markets.
For the company, this was a large risk as green ventures are unknown are this may cause a large fall in profits and sales. Mr. Smith also researched on the sales of Parker pens and discovered that the company had only a small share in the pen industry as most of its profits were coming from pens selling for less than three dollars. Mr. Smith decided that a change was needed, therefore pushed for the promotion of high scale to low scale products. Under the management of Mr. Peterson and Mr. Smith, 400 company managers were trained to market Parker products the same way in all locations. On the other hand, Mr.
Parker was a believer of new product development, turning Parker pens into a company producing over 500 lines of products. His thoughts on the development of the global market were contrary to the ideas of Mr. Peterson and Mr. Smith. 3. -Was it a good idea for Parker Pen to produce and sell a wide range of pens from high-cost to low-cost? Why? It was not a good alternative for Parker Pen to produce and sell pens ranging from high-cost to low-cost. Parker pens are known for the quality in writing instruments and changing their production process by purchasing reduced quality materials will diminish the goodwill of the company.
The first decision of determining if a company should globalize consist of the following items: knowing the company and its strength and weaknesses, knowing the product and its selling points, knowing the home market, knowing the target market and its background, and being able to leaves one’s predetermined values, beliefs, and propositions. There are many factors that need to be taken into consideration. Contrarily, the concept of having a wide range of products can be a success if adequate research was done to understand each markets’ values.
In low growth developing countries, the most viable option may be to sell low cost pens because individuals may not have the ability to afford prestigious ones. 4. -If customers from different places are buying similar products, do you think it is possible to approach different markets with the same advertising theme? Why? Customers from different places may have values in buying similar products, but it is not possible to approach different markets with the same advertising theme. The reason for this is that you need to custom to each market. You need to change your advertising strategies according to the values of that particular location.
For example, some locations may want to feel a personal message directed towards them in order to attract them while others may want advertising to be assertive and straightforward without any underlying messages. By assisting distribution to extensive research, Parker Pens can gain a larger understanding of each markets’ needs when dealing with promotional planning and marketing strategies. In other words, Parker Pen took on the concept of Ethnocentrism and Geocentrism, which means that the use of strategies are the same for all countries worldwide as it is in the home country.
This may be both beneficial and detrimental for a company’s marketing process. Looking at standardization versus adaptation, a potential starting point for Parker Pen could be standardization; however, a company must also know when to make a change. Subsequently, adaption and modification of products would need to be implemented in order to maintain brand recognition in a global society. 5. -Which had been your recommendation for the international marketing plan of Parker Pen in 1982? Since Parker pens was previously established as an industry of high quality writing instruments.
With a product line of 500, the company should have done more research and evaluation of each international target market before pushing their products into that particular country. Since Parker Pen is a company of no direct foreign marketing, in determining which products should be distributed can be handed to an expert and advisor who will perform that research. Market selection is done using secondary data from previous companies who may have been successful in international markets. Another option is to use precedence to determine whether the company will survive in the global industry.
In the Strategic Decisions in International Expansion model, Parker Pen did not go through the decisions of determining whether the company was export ready and what modes of entry the company would enter by. There was a lack of strategy implemented on the marketing mix and how the company were to distribute their resources. For Parker Pen, there was an overuse of self-reference criterion, where both Mr. Peterson and Mr. Smith believed that a high volume of low-costing pens would perform well in locations overseas.
This was a failure to realize differences and be able to put down one’s own values and accept the values of customers and the target market. Consequently, there was a lack of evaluation and knowing thy target. Segmentation variables are those that involve the demographics of each individual. In high developing countries, there may be a larger group of young individuals who are looking for affordable working pens to get them through the day at school, while in high business and technology based environments, individuals may value higher-priced pens because it produces an image of respect and status.