Sector Analysis – Writing Instruments

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The write stuff
by Alison Bowie
Writing instruments are becoming an extension of a person’s image as more and more people look to their pens as an accessory to reflect their style.

Whether we’re working or at leisure, one product that we expect to perform well, every time we use it, is our writing instrument.

Not only that, but increasingly, more and more of us want it to look good and say something positive about us and our lifestyle.

Let’s face it, these small, but powerful products can be great allies, especially when we want to create a good impression.

As Horst Brinkmann, head of international marketing for Stabilo comments: "More and more people are looking at writing instruments as a way to make a personal statement about their image.

"In some areas, particularly the business community, they are now playing an active part in a person’s styling. Writing instruments may only be small, but they are being used to enhance a person’s image, just as wrist watches or a person’s shoes have in the past."

In today’s image conscious climate, a pen is arguably as important an accessory as your shoes, or so many manufacturers and consumer researchers would have us believe.

After all, how many of us have had our pen let us down at a crucial moment? Maybe the ink ran all over our immaculate white shirt, leaving us red-faced and flustered.

Not so good if you’re in that top-level meeting, trying to impress your boss, or indeed writing down the phone number of that impressive person you’ve had your eye on for ages.

It makes sense then that for many consumers, particularly those working in a corporate environment, matching the correct pen for their needs is important.

Not only do they want to feel happy that their choice of writing instrument projects the right image, but they need to know it is reliable and will not let them down.

As a consequence, some consumers may find a comfort zone with their choice of writing instrument – ie. either choose or stumble upon a brand that they grow to know and love over the years – and feeling comfortable and confident in the product, they may well start to display signs of brand loyalty.

It’s then up to the manufacturers of these products, working alongside resellers, to capitalise on this loyalty and keep the consumers coming back for more.

High-end market
Mark Knibbs, head of sales at Pentel UK and Ken MacKenzie, European sales director of Pentel Europe, say the positive performance of brands in the UK, against the backdrop of a general downward trend in the product category, bears out at least some of this theory.

"GfK data indicates that overall, most writing instruments categories are down in volume in the UK. But, despite this, brands seem to be surviving quite well, which Pentel’s own experience bears out," says MacKenzie.

"We’ve maintained our volumes by market-share gains across our core categories. Own-brand share does not appear to be making the same impact that it did a few years ago, which indicates that the brands are winning hearts, minds and wallets in the battle to win the consumer Pound or Euro."

Colleague Mark Knibbs believes that as the fiercest competition seems to be at the lowest price levels where most brand owners don’t compete, there is positive news to report at the higher-priced end of the market.

"GfK reports that a reduction in trade brand activity has seen prices shift slightly higher," he explains. "Sales for the Pentel brand last year enjoyed a modest increase – driven in part by the launch of our Recycology initiative plus our EnerGel range. Both have been well received in the commercial sector and we’ve made good gains in the mass market as well."

He adds: "Again, this indicates that in difficult and challenging times, consumers are turning back to brands that have a heritage and a quality value they trust, rather than products of which they have less understanding."

And it’s this very trend of capitalising on a product’s heritage that in October 2007 led to Snopake, a manufacturer traditionally known for its filing products and Swordfish range, relaunching a familiar name… Platignum.

Originally launched in 1919, the British Platignum Pen Co, was responsible for inventing the retractable ball point and "spy pens" concealing maps and compasses during the Second World War.

Not only this, but for many British school children of a certain age, author included, Platignum became a staple part of their education when, in 1965, it introduced the ink cartridge which became synonymous with UK education for more than 30 years.

Market survival
Today we see a very different Platignum featuring seven new designs. But though it may be redesigned, repackaged and repositioned in the writing instruments’ sector, its new owners are keen to utilise the magic of past glories, while moving the product forward into the new millennium.

Alex Stern, product manager for Snopake’s Platignum explains: "We felt that Platignum had a pretty strong residual value. It’s an amazing thing, but in our research it was clear that people had really warmed to the brand and that it conjured up really good memories. It was a very well known British name.

He adds: "Our research helped us to recognise that there was a clear opportunity to reposition the brand and to launch with a well-priced, premium quality range."

By recognising this, Snopake has come up with a Platignum brand designed to thrive in today’s highly competitive market and appeal to discerning consumers, while still encapsulating the brand’s heritage.

"We like to refer to it as affordable luxury," explains Stern. "We have invested a huge amount in the range. We’ve been very focused on detail. All our products have been designed to reflect the British heritage of the brand, right through to the packaging that has been moulded exclusively for us. It’s all about detail and quality."

The company is already exporting to ten countries, including the Middle East, Africa and the Nordic countries, and is currently in talks with other international distributors, reveals Stern.

So what’s the secret of this early success? "A huge amount of investment and research," reaffirms Stern. "We believe our products are modern classics. They need to be modern enough to appeal to someone younger and classic enough to appeal to someone older. They are a lifestyle product, an accessory and so as we become increasingly fashion conscious and aspirational, so we want products to reflect our own tastes and lifestyles."

Arno Alberty, executive vice president of Pelikan International, also believes lifestyle continues to play a key role in the development of this product sector, and offers manufacturers a positive sign in a very tough marketplace.

"Key growth areas are most definitely to be found in fine writing, particularly with lifestyle and luxury products," he says.

"The ongoing trend within fine writing is the use of precious metal such as sterling silver and gold, which is being combined with other materials, such as artificial or natural materials like wood."

However, with this trend can come a high price, reports Arno Alberty.

"The market is seeing very high raw material and component prices for precious metals and synthetic materials."

According to Alberty, writing instrument manufacturers are also facing other important issues such as "stagnating markets in Western Europe with high competition, indifferent target groups and fast changing consumer needs."

Market slowdown
Alex Sinclair, marketing manager for Pilot UK, is under no illusions as to how challenging the marketplace is right now.

"The market has slowed and 2008/2009 will be tough," he says. "Costs are going up and there is a squeeze on profitability."

On the positive side, however, the company has managed to grow the value of the business, against an overall market decline and has seen major growth in its BegreeN range of recycled writing instruments.
Sinclair says: "Sales increased by 300 percent year on year and BegreeN stockists also increased from under 1,000 in 2006 to more than 3,000."

Pelikan International also sees some positive signs and has identified growing markets in Central Eastern Europe, the Middle East and Asia Pacific.

And despite the ongoing problem of squeezed margins and market saturation, the education market also offers more opportunity, says Alberty.

He explains: "The margin situation is better in education, and in the school segment we expect major growth from our learn-to-write concept. However, it is decreasing year-by-year due to a shrinking population in Europe."

He adds: "Regionally speaking, growth areas are Eastern Europe and Turkey."

Pentel’s MacKenzie reports a similar pattern. "Eastern Europe continues to grow at a fast, double-digit percentage rate and we have experienced some good gains in Scandinavia, while Western Europe has had a modest percentage increase," he comments.

At Stabilo, the company sees opportunities in the Asian market and in April will open a subsidiary in Shanghai.
Horst Brinkmann explains: "The European market is flat but we are seeing positive trends in Asia. Our office in Shanghai offers us a test market with ten million people. We can then look at this in a year or two’s time and decide what we want to do next."

Big performers
Pilot’s Alex Sinclair is also quick to add a note of caution to fellow manufacturers: "The overall market is in decline, so to grow you have to grow your share of the market and with all businesses facing rising costs, including transport and raw materials, this will affect budgets, which have to be carefully allocated and spent wisely."

But what about product? What are the big performers at the moment?

Wendy Vickery, Pentel UK’s marketing manager, believes highlighters and markers are winning the battle.

She explains: "GfK identifies highlighters and markers as increasing in value between September 2006 and September 2007," then adds: "There is still a desire for new and innovative products, whether they are convenience led in the case of Pentel’s retractable markers and highlighters or technology-driven, such as the fast-drying EnerGel liquid gel range."

Vickery has also seen a move towards products supporting cause-related marketing.

Two years ago, Pentel UK began a trade relationship with Breast Cancer Campaign and at the time OPI went to press, had donated more than £175,000 to the charity.

This has been achieved largely through sales of the company’s pink-barrelled Line Style ballpoint pen. More than 850,000 units have been sold to date, reveals Vickery.

She adds: "In France, Germany, Poland and Italy, Pentel is supporting Breast Cancer Charities, with a consistent product offering to raise funds to support vital research and patient care."

Design trends
Manufacturers certainly seem to be paying more attention to the subject of corporate responsibility overall, recognising that there are plenty of commercial reasons, as well as moral ones, for putting something back into society.

Ken MacKenzie of Pentel Europe explains: "Clearly issues such as corporate social responsibility and the environment will have a big impact on all companies, as well as those in the writing instruments industry.

"Being good at what they produce will no longer be sufficient in itself; being good citizens and positively contributing to society makes commercial, as well as moral, sense."

In terms of design trends to look out for, Pentel UK’s Vickery believes the convenience factor of retractable markers will continue to attract consumers in the coming year.

She also adds: "Mini pens and smaller scale versions of other products have proved popular in 2007 and, with convenience and less wastage important factors in consumer decision making, this trend looks set to continue – particularly for younger consumers."

As for commercial buyers, she says: "Commercial buyers are less influenced by trend – although bright colours for the office are popular – and performance, value and, increasingly, environmental considerations are more convincing reasons to purchase." When it comes to colour trends emerging for 2008, Vickery believes one of the key developments will be a less obvious split between retail and commercial.

However, she does expect that "retail will continue to blaze a trail with the more adventurous colours, particularly when it comes to ink."

She continues: "Commercial end-users are broadening their horizons and selecting colours that previously they would have shied away from."

Proof of this can be seen in the increased take-up of violet ink colours, says Vickery. "Why? Well, it’s a little more daring than conventional black and blue, but not too far off the spectrum to be deemed inappropriate," she explains.

Moving into the education sector, Vickery names green as the colour to watch out for, as more and more teachers choose the colour for marking assignments, instead of the more traditional red.

Pelikan’s Arno Alberty believes Europe will see a mix of colours serving different areas of the market.

"For fine writing, gold and silver combined with classical colours like aquamarine blue, combined with trend colours aubergine, black and white will be popular. For schools, juicy orange, purple and black and white will emerge," he says.

And for Horst Brinkmann of Stabilo, "white is the new black" this year.

He explains: "White alone can look rather cheap, but when combined and contrasted with red, blue and green it looks brilliant and this will be a trend to look out for in the coming months."

Of course, practical issues will often determine just how far resellers can go with new colours, says Vickery.

"The practicalities of shelf space will determine how far resellers are prepared to support diversification into many different, unproven ink colours and the days of being able to stock a vast range of gel colours are probably over for most."

Back To School has traditionally been a key selling time for manufacturers, but Mark Knibbs, head of sales for Pentel UK believes the dynamics have changed dramatically in the past few years.

"It has divided into two distinct periods: Back to School and Back to College," he explains.

"It is important to understand that different products appeal to these two distinct categories and the consumer offering has to be adapted accordingly. The emergence of the key grocery players has certainly shifted the volume mix and most independent retailers would acknowledge that they don’t have a significant Back To School business now.

He adds: "Volume sales in 2007 were up significantly this past year for Back To School/College for Pentel in the UK across all channels as a whole – core growth being driven by grocery, at the expense of other customers."

The year ahead
So, looking ahead to the coming year, what can resellers expect from manufacturers?

Pelikan will be taking a multi-pronged approach with its 2008 promotions, reveals Arno Alberty.

"For fine writing instruments we will be focusing on seasonal POS decorations for shop windows and glass cabinets and individual product promotions for existing and new product lines," he says.

"On the education side, we will focus on our innovative learn-to-write system griffix, which will be launched through brochures for teachers and parents, direct marketing and internet activities, plus a TV commercial."

Wendy Vickery of Pentel UK says added value promotions will take centre stage.

"For 2008 we are planning an exciting range of added value promotions, which will target the Back To School and Back To College markets effectively," she reveals. "EnerGel will feature prominently, as well as reusable, or refillable or longer lasting Recycology products which will have particular appeal for students."

The company will run a major campaign across Europe for Recycology, an umbrella brand that incorporates writing instruments and soft plastics products made from a minimum of 50 percent recycled material.

For Snopake 2008 will see continued development of the Platignum brand.

Alex Stern explains: "It’s very early days for Platignum, but we have been extremely encouraged by the reaction so far. We have put a tremendous amount of investment into this and we feel confident that Platignum is a fresh, new range that offers a real alternative to dealers. We are genuinely excited by the opportunities Platignum can offer the market."

For Pilot UK the first quarter of 2008 sees the promotion of its Whiteboard product V Board Master, made from 91 percent recycled material.

Alex Sinclair adds: "Our ‘New Year, New You’ promotion is also well underway, which promotes our new look V System range of liquid ink pens and gives buyers the chance to claim a free beauty treatment or cut and blow dry when they buy special promotional packs from the range."

Stabilo announces 2008 range
Stabilo has lined up a wealth of European-wide product launches in 2008 designed to wow consumers and resellers alike.

Not only will the company be adding to its Stabilo BOSS highlighter and Stabilo ‘S move range, but it will unveil the first two products in its new Office Culture range, due to debut in the first quarter.

The company will also be heavily promoting its new fineliner to accompany the Point 88.

The ‘S move Easy Ergo is an ergonomical, mechanical pencil, designed to sit alongside the popular ‘S move range, says Horst Brinkmann, head of international marketing.

"It will feature all the features and benefits of the range, ie. there will be products for left- and right-handed users and it will have the very distinctive shape and grip zone."
The product will be available from early February.
Stabilo’s second launch is the BOSS Executive highlighter, featuring ink that reduces smudging on inkjet printed documents. This will be available across Europe by the second quarter.
Point Visco is an addition to the Point 88 fineliner that has seen tremendous success in Germany, Italy, Holland, Austria and Switzerland.
Launched in October 2007, the new product sold out rapidly. It will be available throughout Europe by the end of the first quarter.
Finally, 2008 also sees the launch of Stabilo’s Office Culture range.

Brinkmann explains: "White is being seen in many circles as the new black for 2008, and with this in mind we are launching the first two products in our new Office Culture range. They are the Pure, the new ballpoint and the Dynamic, a retractable gel pen. They are beautifully designed products where white has been combined with other colours to dramatic effect."

These will also be available throughout Europe by the end of the first quarter.

Staedtler: Putting ideas on paper
Whenever an idea or sudden inspiration comes to mind, what’s the first thing you do? Right – you reach for a pencil or pen to write, scribble, draw or highlight your thoughts to show them to others or to remind yourself later. It can be said that every idea starts with a pencil or pen.

Staedtler proudly claims to give "form to people’s ideas" the whole world over. The firm sees its products as helpful tools for promoting the flow of creative thought, coupled with the writing comfort and innovative product features that are sure to "make a Staedtler your favourite writing instrument".

The company continuously strives to develop better writing, colouring and drawing instruments – product ideas that "captivate through their intelligent design and finesse, and, above all, meet our exacting demands for quality".

For example, as of this year, all of Staedtler’s coloured pencils, with the exception of karat aquarelle, will be equipped with protective lead coating.

To make ideas visible, we all need a product that doesn’t slow down creativity and enables pleasant and dependable writing, colouring or drawing.

Something that Staedtler sums up with its simple mantra:

"Staedtler – Your inspiration!"