Luxor Writing Instruments Private Limited - Marketing Pens in India

            

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Themes: Marketing Mix
Period : 1982-2003
Organization : Luxor Writing Instruments Private Limited
Pub Date : 2003
Countries : India
Industry : Premium Pens

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Case Code : MKTG058
Case Length : 12 Pages
Price: Rs. 300;

Luxor Writing Instruments Private Limited - Marketing Pens in India | Case Study



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Products and Pricing Contd...

LWIPL was able to sell 1,00,000 Pilot pens in the very first year of their launch. However, the Pilot pens launched initially were not refillable. Due to the price conscious nature of middle class people in India, the concept of disposable pens was not cherished for long. This prompted the company to launch a new, refillable variant of these pens.

The new product was well received by the middle class consumers as well as school and college going students, teachers, middle and senior level executives, resulting in a huge surge in demand for these pens. Within four years of launch, the annual sales of Pilot pens had increased ten fold to one million pens. Buoyed by the success of Pilot pens, in 1990, LWIPL decided to launch another product under the 'Pilot' brand name, Luxor 0.5 mm Pilot V5. Priced at Rs.45. each, these pens were targeted at the middle and senior level executives.

The attractive design of the pen and the superior technology (it had a liquid ink feeder14 system) used, contributed to the success of the brand. By 1995, the annual sales of Pilot pens had crossed 10 million. LWIPL decided to go for further brand extension in 1997, and launched the Pilot V7 which wrote bolder compared to V5. LWIPL's pricing strategy was determined by factors such as the demand for products, their brand image and the nature of the target audience. When Pilot 05 was launched in 1982, it was priced at Rs.10, and it was considered to be expensive at that time.

However, in 1990, eight years after its launch, when the demand for these pens reached its peak, Luxor sold them at Rs. 25 each. The price continued to remain the same till early 2003, indicating the stagnant nature of its demand. On the other hand, Pilot V5 was priced at Rs.45 at the time of its launch. These pens were priced high due to its superior technology and the brand image that Pilot pens enjoyed. However, after 12 years of launch, the price of these pens had to be reduced by Rs.5.

In 1996, LWIPL launched Parker pens in India. Though Parker pens were popular in India, they were available only in the grey market. Parker pens were primarily targeted at the upper middle class consumers, senior level executives and bureaucrats. The initial range of Parker pens launched included Sonnet, Rialto, Frontier, Vector and Parker Classic. The most crucial decision for LWIPL was pricing. At the time of the launch, the prices ranged between Rs.90 to Rs.10,000.

Priced at Rs.90, the "Vector" brand of pens was the cheapest in the range. Within four years, "Vector" became the largest selling Parker brand in India. During the corresponding period, the price was increased to Rs. 140. In 1999, LWIPL launched the 'Papermate' brand of pens in India. Papermate was the largest selling brand in the US during that time. The brand strengthened the presence of LWIPL in the low priced pen segment.

These pens were primarily targeted at the school and college students and were priced in the range of Rs 4 to Rs 13. The specialty of this product was that they possessed the Lubrigude ink technology15, which ensured that the ink did not leak, thereby offering a comfortable writing experience. In order to penetrate the Indian market, the company offered these global brands at lower prices. For example, the Parker Vector roller pens were launched at $3 compared to $9 in Europe.

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14] It enabled the ink to be filled directly into the main body of the pen.
15] The technology enables pens not to smudge, smear, leak or leave blobs of ink on paper.