Chairman and President | 18 Jul 2003
"By continually introducing new products, expanding our target base and with Amitabh Bachchan endorsing our product, we are confident that Parker will be a Rs 100 crore brand by next year."
In this session of Brand Speak, D.K. Jain - Chairman and President, Luxor Writing Instruments Pvt. Ltd., shares his thoughts on Luxor's brand positioning, the company's belief in below-the-line marketing, and plans of expansion, consolidation and communication, with exchange4media's Jasmeen Dugal.
Q. What do you think is the size of the pen market in India?
The pen market at the consumer value is Rs 14-15 crore, and steadily growing at a rate of 10-12%. The export market for Indian pens is Rs 300 crore, growing at a rate of 15%
Q. In such a vast market, what is your key differentiator?
Luxor is a special brand; we are not like our competitors who are producing pens everyday and reducing prices. We are a branded company and have five brands - Luxor, Parker, Papermate, Pilot and Waterman.
Our key differentiator is that we look at the pen business from the consumers' perspective. Starting from a small child, what does he/she need? Colored pens and crayons. We produce from that angle. A parent having three-four children must be economical in getting these products, so we price the pens accordingly. Similarly, when the child goes to school, we see the need of the student, whether it is a hi-tech pen or a specialized technology pen. And then, similarly, we see what the middle-aged are doing, what the family needs and we go right up to the top man of the country. Here, the range is expensive. Therefore, we see the economical needs of our target audience and price the pens accordingly. Our pens range from Rs 1 for a colored pen, Rs 3 for a ball pen and goes up to Rs 40,000 for a Waterman. If a rich man wants to buy his wife a diamond, he can also buy her a Rs 40,000 pen!
That is our strategy - we cater to all classes of people at a price that is value for money.
Q. Luxor has renewed its contract with Amitabh Bachchan for Parker. Bachchan was signed on by LWIPL a couple of years back as part of a repositioning exercise to connect and identify with the young and old alike. Has the star's universal appeal helped in effectively communicating your brand message to a wider target audience?
Luxor has renewed its contract with Amitabh Bachchan for the next three years, starting April 2003 up to March 31, 2005. Using Amitabh Bachchan as our brand manager has helped in strengthening brand image and recall within the target audience.
In India, people believe that a pen is a normal writing instrument and should not cost over Rs 10. So why should they go for an expensive brand like Parker? With Amitabh Bachchan - a top icon in Bollywood whom the young and old alike can identify with - saying that it is the best brand, people feel why not spend a little more and try it out? Trying it 'just one time', if the person is satisfied with the product, he becomes our permanent customer, and he buys it repeatedly with its accessories.
Q. You mentioned that Parker would be a 100 crore brand by next year. How do you intend to achieve this target?
With Amitabh Bachchan as our Brand Ambassador, his fans across the length and breadth of the country will definitely buy our pens. Secondly, we had been only targeting 40-50 main towns in India; today we are targeting more than 250 cities. Expanding our network will help us in achieving this target. By continually introducing new products, expanding our target base and with Amitabh Bachchan endorsing our product, we are confident that Parker will be a Rs 100 crore brand by next year.
Q. Luxor has recently entered the gel market with 'Gel One' - what is your strategy for competing against the established 'Add Gel'?
Add Gel is the leader in the gel market, and Luxor is a new entrant. We have entered this market quite late, as we wanted to introduce Gel Pens with the most superior technology at an affordable price. The pen is priced Rs 8 and the refill of Gel One is priced at Rs 5, the cheapest proposition in the gel market. Our strategy to break into the gel market is to give a better product at a cheaper price.
Q. With the market flooded with Chinese brands, how do you plan to combat this threat?
No Chinese brand has been successful in India where writing instruments are concerned. Their quality is not as superior as the Indian brands. They entered the market with a low quality and could not find a good partner, so they have not managed to establish a stronghold. To do this, Chinese brands have to improve their quality, reduce their pricing and find a good partner. However, Indian companies are so busy with production that they don't need a Chinese partner. So I don't see Chinese brands posing a serious threat to the Indian pen industry in general.
Q. How are you strengthening your base in the children segment?
Luxor has been very closely connected with the children segment. To strengthen its base here, LWIPL has launched an extensive array of color pens, crayons, sketch pens, tattoo markers etc. In fact, Luxor is the only company in India that caters to the complete sketching, drawing and coloring needs of children. The entire children's range is launched under its sub-brand "Luxor Junior". All products and communication of Luxor children's range feature a clown called Junior, which is one of the first Indian characterizations in the writing instruments industry. Further strengthening its association with children, Luxor ran a month-long promotion, "Buy, Choose, Tickle and Win" in association with McDonalds, where one could just walk into a McDonalds outlet and order a Happy Meal, with which one gets a scratch card coupon. On scratching the coupon, children can win a range of prizes from Luxor Magic Color Pens to Luxor Crayfun Pens. Special sales counters were also set up at select McDonalds outlets, offering a range of Luxor pens.
Moreover, Luxor has initiated a number of children's activities over the years. Be it independent school activities or coloring contests, painting competitions, writing competitions, color splash, NIE Children's Film festival or Parker Voices of Tomorrow, Luxor has always been a pioneer in providing support to activities related to children.
Q. Why do you feel pens as a category is advertising so much?
It is the law of nature. Production of pens is increasing by the day. Being such a large country, it is very difficult to build your brand with the population of 100 crore. So advertising has to be done to reach across Assam, Kerala, Sikkim etc. have to tell the people the brand is alive.
We are continuously advertising to tell the people that Parker is here; Pilot is here, Amitabh Bachchan is right here endorsing the products etc. Of course, marketing and sales play a very important role, but advertising helps to give pull.
Q. What is the extent of your marketing activity?
We do focus a lot on marketing activities. Recently we introduced an exclusive deal this summer with 'Summer Mega Offer Pack'. With a special assortment of writing instruments from LWIPL's four popular brands - Parker, Pilot, Luxor and Papermate, this pack aims to target the distributors and the customers through a unique offer. Priced at Rs 5115, it provides the retailer greater value for money with an enhanced margin of 28% and a Yashica Camera worth Rs 1305 free with the pack.
In addition, Luxor launched the "Jo Jita Vohi Sikander" Contest, a unique promotion for traders. They would enjoy the benefits of the Club Parker membership wherein they would receive direct communication from the company related to new products, exclusive signages, and discount coupons. We also gave traders an opportunity to win exciting prizes like Samsung TV, Birla OTG, Moulinex Juicer Mixer Grinder and VIP Strolley, if they achieved a certain sales target.
Q. Do you rely heavily on below-the-line support? Tell us about some of your BTL campaigns.
We do many events because it is a direct way of reaching out to the consumer. Last year, we organized a painting competition sponsored by The Times of India, at Pragati Maidan. Over 10,000 students attended the event. We sponsored special prizes by Luxor. If 10,000 students go home with Luxor pens, it goes to 10,000 families; multiply it by 4 - around 40,000 people
see the pens.
Luxor also participated in The India International Trade Fair (IITF)-2002 at Pragati Madan, where more than 7,000 companies participated. All our brands were showcased at the stall. Our main objective was to showcase and promote our range of writing instruments - all under one roof. It paid off, as we got an overwhelming response from this fair.
We also hold several theme events to cash in on a current trend. To ignite the world cup fever, Luxor came up with 'Catch A Ball' promotion, where we had renowned cartoonist SudhirTailang designing packs that have cartoons of cricketers. With this promotion, cricket lovers got a Beta Roller Ball Pen in new body colors like Orange, Black, Fluorescent Yellow and Blue and a cricket ball worth Rs 20 free.
After the successful 'Catch a Ball' promotion, we brought out the "Luxor Cricket 2003 pen". Priced at Rs 145, this pen had a silver body with blue ink, the all time favorite of Indian cricket. Crafted with the cricket bat clip and cricket ball on the top of the pen, the entire schedule of the world cup 2003 with complete details of the teams, the venue for the match's etc was printed at the back of the packaging. The concept behind it was to capture the world cup fever and to allure religious cricket followers.
Q. How has PR helped in building the image of your brand?
PR is very important for any brand. Unless you use extensive public relations, you cannot build the product into the minds of the people. So we have to do PR through the media, at events, seminars, schools etc. If Bill Clinton is holding a conference at Maurya Sheraton, our strategy will be to find a way to ensure that all the folders include a Luxor pen. We also have a business-to-business department through which we try to put our pens in all the hotels in the country. So if people are staying at a particular hotel, and the room has a pen, the guests have the time to comfortably check out the pen and they remember it.
Q. Tell us about your disinvestments.
We have a stake in Qutb Hotel. We have launched more than eighty products in the Hazel brand, which is in the food segment. We are looking forward to seeing how the food business can grow. Tea and mineral water are under research. Mineral water is a very good product into which the Luxor brand can fit in, and plans are currently on the drawing board.