Background

Company • Founded in 1922 Customer

• Shifted from making fountain pen to • Catered to several market segments
inexpensive ball point pen • Consumer promotion was used
• Utilitarian design reflecting founder’s core
values • Consumers were not price-sensitive
• Acquired by Utley in 1980

Competition • Over 50 major firms competing in global
market
• Hyper-competitive battle for retail shelf-
space among mass brands
• Prominent brands like BIC, Pilot,
Papermate, etc.
Collaborator • Sold through retailers who purchased on
deals
• Discounts and better margin were usually
deciding factor for retailers
• Consumers were influenced by brand
• Consumers has coupon promotion etc. offers

Context • Technological : Innovation usually meant

superficial design changes
• Economical : Consumers were not price
sensitive
• Threat : Competition’s better profit margins for
retailers leading to declining market share of 1
 Decision Problem

“To reduce trade discounting in return for a ‘marketing controlled,

consumer oriented MDF’ to lessen the decline in gross profit
margins”

2
 Alternatives

Shifting to consumer-
oriented MDF

a.Not Changing to MDF

Program
 Alternative Analysis
Alternative – 1
• Shifting to consumer-oriented MDF could generate an
additional increase in retail sales of 5% and would
result in gross profit margin of 2 points-from 36-38%
• To buy more co-op advertising and consumer-directed
advertising such as “instant coupons”.
• The advertising was devoted to increase the brand
awareness so that it would mold a brand equity in
consumer’s mind.
Alternative – 2
• In short term, the reduction from trade promotion
would enhance the price of Clique Pens in retailer level.
• With current competition condition, and similartiy in
product, the retailer would easily change clique pens to
other brand. It would occur because the competitior
was assumed would still use the thin margin strategy.
• If MDF is implemented it would result in decrease in
sales of over 9%, if discounts were reduced, but a
positive impact of gross profit of 2% could occur
 Recommendations

• Use MDF programs and resize the contribution of Retailer’s discount to MDF Programs
(Consumer Promotion & Advertising Budget)
• Make the retailer sure that our product is good although the price increase.
• Clique needs to focus on growing their brand instead of focusing on only marketing and
sales and need to focus on awareness & positioning
• The relationship with the retailers can be improved
• The packaging of their product can be improved, it can be made more fashionable and
vibrant
• New focus on market segmentation so that needs/wants of students could be identified
and accordingly packaging could be tailored

5
THANK YOU