Luxor Writing Instruments Private Limited - Marketing Pens in India

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Background Note Contd...

By early 2002, some of the most popular brands in the Indian pen market comprised of domestic brands such as Reynolds, Luxor, Cello, Rotomac, Kores, Today's, Montex and Add pens and foreign brands such as Mont Blanc, Flair (with Pierre Cardin), Uniball and more. Consumers now had a wider choice, both in terms of different variety and the number of brands available.

Gradually, the competition among different pen brands intensified, which in turn, prompted these companies to increase their spending on promotional activities. According to the 2001-2002 figures, the writing instruments industry in India was worth approximately Rs.15 billion10. Studies11 on the industry had revealed that there were around fifteen organized players, which included both domestic and international companies and more than 600 unorganized players. Though, in the past, unorganized players accounted for a sizable share of the industry, their share had decreased significantly from around 90% in 1990 to just 20% in 2002. The huge potential that the industry offered prompted existing companies to expand their manufacturing facilities and encouraged new companies to enter the industry. This had led to intense competition in the industry. The studies also revealed that the companies in the organized sector were putting efforts in offering good quality products at competitive prices. At the same time, impetus was given to increase the visibility of their products in the minds of target customers.

Established in 1963, Luxor had emerged as one of the leading companies in the pen industry. According to analysts, Luxor's marketing mix helped it to capture a sizeable share of the industry. They also felt that Luxor's 50-50 joint venture with Gillette Company¹² in 1996 helped it to strengthen its position in the industry. After entering into the joint venture, Luxor was renamed as Luxor Writing Instruments Private Limited (LWIPL).

The Marketing Mix

Products and Pricing

LWIPL had launched its first brand in 1963 - the 'Artist' fountain pen. However, owing to its small scale of operations during that time, the pens were made available only in Delhi and surrounding areas. During the late 1960's, the Artist brand was renamed as 'Luxor.' In 1982, LWIPL launched Pilot 05 microtip pens with needle point¹³ technology.

Priced at Rs.10, this was the first model of Pilot pens to be officially launched in India. The pens were manufactured at the Delhi plant of LWIPL. Though Pilot pens were available in India prior to the launch, they were available only in the grey market. LWIPL invested heavily to upgrade its technology to manufacture microtip pens.

These pens were launched with the intention of bridging the gap between ball point and fountain pens. Microtip pen was similar to a ball point pen, with the ink filled within. This turned out to be a unique selling proposition for Pilot pens and they were quite successful as they were considered to be an ideal substitute for fountain pens.

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10] In an article titled "Charlie Parker's license to Quill," by Pramila N. Phatarphekar in Outlook dated March 4, 2002.
11] In an article titled "Luxor takes FMCG route to market Papermate stationery products" dated September 2, 1999, by Kumar Kaushalam posted on www.indianexpress.com.
12] Gillette is a US based company and is the world leader in shaving products. Its stationary products division had world famous brands such as Parker and Papermate. In 2000, Gillette sold its stationary products division to Newell Rubbermaid.
13] The tip of the pen is very sharp and resembles a needle.

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