Parker Pen Co. is a private company that manufactures writing instruments. Founded in 1888, it was acquired by Gillette in 1993 and then sold to Newell Rubbermaid in 2000. Parker produces fountain pens, ballpoint pens, inks, and refills. Its brands include Parker, Paper Mate, Waterman, and Liquid Paper.
In the past, Parker pursued a strategy of rigid centralization and standardization under CEO James Peterson. It began marketing lower-end products more widely. This strategic change failed as it alienated loyal customers and did not account for differences in global markets. The key lessons are that not all products can be marketed uniformly worldwide, and rapid strategic changes can damage brand loyalty
2. Type Private (subsidiary of Newell Rubbermaid)
Industry Writing instruments
Founded 1888
Founder George Safford Parker
Headquarters Newhaven, East Sussex, England
Area served Worldwide
Key people George Safford Parker, founder, Kenneth Parker
In 1993 Parker was acquired by the Gillette Company, which already owned the Paper Mate
brand, one of the best-selling disposable ballpoints. Gillette sold the writing instruments
division in 2000 to Newell Rubbermaid, whose own Sanford Stationery Division became the
largest in the world—owning such brand names as Rotring, Sharpie, Reynolds as well as
Parker, Paper Mate, Waterman, and Liquid Paper.
3. Products available in the Market
TYPE MODEL
5TH Technology I.M., Ingenuity, Sonnet, Urban
Fountain pens
Duofold, Premier, Sonnet, Facet, Esprit, Urban,
I.M., Vector, Jotter
Ballpoint pens
Facet, Executive, Esprit, Frontier, Urban, I.M.,
Vector, Jotter
Inks and refills Quink, 5TH Mode
6. What would you do if James
Peterson's shoes in January 1982?
• Designing global Strategy with reference to
Parker’s present market conditions.
• Decentralized marketing strategy
• Retain old successful managers.
7. What changes if any, would you make
in Parker’s marketing strategy?
• Keeping only High end products to keep
loyalty untouched
• Adopting global marketing strategy with lack
of rigidity and required
customization
• Continuing with the previous
decentralized strategy with
gradual expansion
8. Which aspects of Parker’s structure would
you discard? Which would you keep?
Discard
• Rigid centralization
• Faulty technology
• Self-reference criterion of peterson
Keep
• Retain old, experienced management
staffs
• Providing more freedom to the country
managers, subsidiaries and agencies
• Give due Importance on the R&D Cells
9. Assume that you are James Peterson and you have just hired a new
management team composed oh highly qualified executives from
outside companies. You and your team are convinced that you have
the solution to Parker’s problems but there are many holdovers who
disagree with you. How would you incorporate the views of Parker
management into your plan?
This is a crucial decision for an individual as it is
hard to choose between experience and
modernization.
The best solution to this problem
would be to use the experience of the
holdovers and inculcate it into the
new teams ideas that would even give
an edge to the competitors
11. Why did Peterson’s global strategy fail?
• Self-reference criterion
• Rigid centralization
• Pursuing the market and products of lower end in
addition to higher end products
• Use of faulty technology in production plant
• Firing of successful managers
12. What lessons can be drawn from
the decline and fall of Parker Pen?
• One should always be careful with the customers it has
before trying to expand and grab more customers
because a rapid strategic change can affect the loyal
customers.
• All products cannot be marketed in throughout the
globe equally, centralization always doesn't work for all
products.
• For a product like pen it is very important to decide how
you want to place your Brand.
13. Though late but still PARKER’s management realized that the pen business consisted of “little
pocket of entrepreneurial activity around the world” were not susceptible to centralized,
standardize approach. So it is well understood that we must understand the requirement of
the market and plan their marketing effort accordingly.
Conclusion
Other wise this would hit the wall and crashed like the
effort of Mr. Peterson and will lead the company in a
riskier situation like PARKER. Again sudden shifting from
one strategy to another also proves to be disastrous for a
company. It should be done slowly and gradually giving
sufficient time to the consumer to adopt with the change.
Beside this an international marketer should also judge
and assess the differences of the varying situation
judiciously to lessen risk of his marketing effort. .
Notas do Editor
? Self-Reference Criterion (SRC). While crafting the new strategy for PARKER Mr. Peterson was biased due to his SRC, which mainly came from his vast work experience on global marketing concept. He totally ignored the existing situation of PARKER and forced the company to change its strategy ignoring the requirement of market. ? Rigid Centralization. Many company involved in global marketing do not rigidly centralized all their marketing effort due to the huge variety in the culture of different region. In some cases companies made little or few adjustments in their standardize global effort to meet the requirements of different environment. But Mr. Peterson and his strategy had the rigidity in following centralized packaging, pricing, and promotional materials. This rigidity was not accepted by the customers of different culture.? Pursuing the Market and Products of Lower End in Addition to Higher End Products. Over the period of time PARKER established an image, as the seller of high end products. But the new CEO suddenly started pursuing the lower end of the market and produced with lower priced pen. This was counter to PARKER’s tradition and image and many of its loyal customers could not accept this. Ultimately this proved to be an ill – advice for PARKER.? Use of Faulty Technology in Production Plant. Repeated mechanical fault caused disturbance in the productivity of the automated production plant. This is another reason for the failure of new strategy. ? Firing of Successful Managers. Mr. Peterson and his team fired many of veteran managers of the company. In some case a move was greeted with dismay by the employees within the company, which ultimately affected the productivity of the company.