Pen Industry With the Aid of the Instance Survey

1 Introduction

The proposed undertaking as discussed above tends to set visible radiation on the current state of affairs in the pen industry with the aid of the instance survey of Cello Pens and Stationery Pvt Ltd. The chosen company is normally called by their trade name name “ Cello ” . Mr G. D. Rathod the laminitis and present president of the company were in the concern of fabricating plastic bracelets and plastic PVC slippers. He got inspired with the celluloid movie used in doing bracelets and incorporated the trade name name Cello. Now the company is headed by his boies Mr Pradeep Rathod ( Managing Director ) and Mr Pankaj Rathod ( Deputy Managing Director ) .

Harmonizing to Sayanti Banerjee ( 2008 ) , Mr G D Rathod started with a little mill in 1986 with seven machines and a work force of 60 people. He started with the fabrication of casseroles, which was a really new construct at that clip for the Indian consumers.

Subsequently this merchandise was named as hot pot in the market. As the clip passed, they learned the art of fabricating hot pots really expeditiously and achieved market leading. In the initial period, to educate consumers about the merchandise, aggressive selling scheme was adopted. Different signifiers of media were used for the intent of pass oning the benefits, utilizations and singularity of the merchandise. Their ad run “ Say Hello to Cello ” is still really celebrated amongst consumers. The scheme used by Mr G D Rathod, helped him derive focal point from consumers in a immense proportion which gave a head start to his new construct and concern.

The adage “ Well started is half done ” suits this state of affairs really good, but after all its concern which is bundled with variableness ‘s which has changed the fate of many concerns. A really good illustration would be the instance of Gerald Ratner, whose celebrated media gaffe forced him to vacate from the chairmanship of the company ( Ratner Group ) founded by him. Then after several efforts he came with the thought of on-line jewelry merchandising which helped him derive success once more ( geraldonline.com ) . So in this instance we can see that his one error made him free his ain concern.

Coming back to Cello, with clip they gained expertness in the art of fabrication plastic moulded merchandises, which helped them derive market leading. They developed a scope of merchandises, like functioning trays, fictile containers, plastic moulded furniture, pails, etc. Mr G D Rathod, knew that merely holding a large scope of merchandises and a good fabrication installation would non give a long term sustainability to his concern. He had besides developed a countrywide distribution web which helped them administer their merchandises to every corner of the state. Their distribution web was non restricted to the Indian boundaries ; they have regular exports to states in Middle East, Europe, USA, etc.

Following are the factors, which aided Cello in developing and keeping a immense countrywide distribution web:

• Coupled with aggressive advertisement they maintained good demand – supply equilibrium.
• Their merchandises were a symbol of quality and dependability. So the merchandises were in a good demand. This gave a good volume concern to the distributers besides.
• Other grounds are as follows
  • It ‘s a hard currency rich company which made payment construction really easy for distributers.
  • They developed new theoretical accounts and merchandises really rapidly, which would give distributers a really good range of making concern.

Increasing the scope of merchandises under the same trade name had been the scheme of the Cello group. But in the twelvemonth 1996, they started with a venture of fabricating ball point pens. Unlike the available trade names in the market, Cello pens were installed with a gum elastic clasp which made composing easier. Fingers would acquire a shock absorber and therefore uninterrupted composing would non be painful. Harmonizing to www.cellopens.com ( 2009 ) , they use a Swiss machine called Mikron for fabricating tips of the pen. This machine provides the best quality and dependable tips required in a pen. The inks they use in their pen are made from Japanese engineering which enables visible radiation handed and pressure free authorship.

Similar to their scheme for family merchandises, they adopted the aggressive selling system to educate people about their new construct. In all their ad runs rubber gripping, Swiss tip and Nipponese ink were used as foregrounding factors to pull clients. The big graduated table companies at that clip in the pen market were Reynolds, Montex, Rotomac, Parker, Linc, etc. Mass advertisement was non a really normally used construct. A company used to acquire in advertisement, but was considered as a portion of regular concern. One of the cardinal factors that lead to their success in the pen market was that all the merchandises they launched ab initio were accepted by clients. A inquiry would originate, how Cello could perforate the pen market so easy. Following are a few of the chief grounds:

• Development of a new construct which would be different from current market tendencies and was really profiting the terminal consumers.
• Aggressively selling that concept to educate the consumers, for which they gave their adverts in all signifiers of media. Their Television advertisement had its focal point on the benefits of utilizing a gripper pen which truly attracted a batch of consumers.
• Making full usage of the expertness they held in the fabrication field.
• Their available widespread distribution web at the national and international degree.
• Developing new scope in a really short clip. Their chief scheme in both family and pen market was to develop a immense scope of merchandises for both national and international markets. Their scope was non restricted to ball point pens ; they started fabricating gel pens, micro tip pens, highlighters, lasting markets, study pens etc.

The above were the competencies Cello had when they entered the pen market. Pen was a really new merchandise for Cello, but they still did n’t alter the distributers and on the other manus distributers gave them a really good and large support in developing the new market. Distributors considered it an chance to research new market and therefore would besides assist them in widening their range of concern.

But now the state of affairs has changed. Presently state of affairs in the pen market is really competitory. All large trade names have started with aggressive selling and developing new scopes and theoretical accounts harmonizing to the market tendencies. Presently the latest tendencies in the pen market are metallic organic structure pens and it was introduced by a company called ADD. It non like before that lone plastic organic structure pens were available.

In the present state of affairs Cello is the market leader in pen industry with a interest of 36 – 37 % . The one-year turnover of the nearest rival is half of Cello ‘s one-year turnover. Ambitions of the Cello group are non restricted to being the market leaders in the Indian Pen market. They aimed at spread outing their company at the planetary degree. Harmonizing to their company website www.celloworld.net, they export their pens to Canada, USA, Belgium, Uganda, Kenya, Cambodia, Malaysia, Ghana, Guinea, Bangladesh, Jamaica, Conakary, Congo, Saudi Arabia, Cyprus and many other topographic points.

The above was a brief treatment of Cello ‘s yesteryear and present company profile and activities.

2 Organizational Analysis

For the intent of understanding the environment the writer will do usage of the PEST. PEST stands for political, economical, societal, technological and legal.

2.a. ) Environment

PEST theoretical account was applied for analyzing the macro environment.

Political / Legal:

Harmonizing to Groucutt ( 2002 ) , following elements form portion of the political environment:

“ Expropriation, arrogation, domestication, civil agitation and terrorist act. ”

Indian economic system is at a underdeveloped phase and is turning with springs and bounds. Furthermore the authorities is stable and except terrorist act there is non much unrest in the state.

The authorities is in a changeless effort to assist little and large graduated table organisations to turn. Any organisation which is turning at a good rate is extremely apprehended and is considered as the drivers of the economic system. Furthermore Cello is involved in exports, which helps the economic system grow much faster. Thus they are a positive subscriber towards Balance of Trade. So politically there are non many restraints that might move as menaces to the organisation. The fabrication substructure of Cello is in the province of Gujarat which is considered as the most vivacious province in footings of development in India. So politically it could be said that Cello has a batch of chances for growing.

Economic:

Following are the elements which form the economic environment:

• “ Business and economic rhythms like Depression, recovery, steady growing, stagnancy and recession.
• Inflation
• Interest rates
• Tax systems
• Income degrees
• Poverty – developing states ” ( Groucutt, 2002 )

India is in the growing phase and even in the present state of affairs of recession the one-year growing is of 7 % – 8 % . Multinational companies from all over the universe are making outsourcing from India ( non merely call Centres but merchandises besides ) . Thus it has increased the handiness of occupations and has besides pumped immense sum financess in the economic system. Furthermore India at nowadays is considered the IT hub of the universe. On the other manus Indian companies have started traveling planetary and this has had a immense consequence on the economic system. Therefore if Cello intends to advance expensive merchandises or want to travel with their on-going merchandises in the market at that place would n’t be much job.

On the other manus the planetary recession has started holding its impact on the India economic system. Organizations like Tata, are experiencing the Burnss after they bought companies like Jaguar and Corus. Even they had to cut occupations because of the recession. Thus finally the overall consequence would do the Indian economic system weak. The proposed research the merchandise in treatment is a normal ball point pen. In a normal state of affairs, persons might travel for a pen which would be good in quality and authorship. But to avoid any opposition in the market, Cello must seek and present a few merchandises which would be inexpensive in term of monetary value. This would assist them non be a victim of the recession.

In footings of poorness, still a immense figure of people in India are populating under poorness line. In order to pull those multitudes they must hold merchandises low-cost to them.

From the above, the research worker would wish to propose that Cello can do the turning economic system as an chance to present luxury pens and on the same manus they would besides hold to concentrate on low terminal pens because of poorness and recession.

Social

Cello pens are fast traveling consumer goods and they can besides be called a pen for the multitudes. Their pens are in a really low-cost scope, therefore at that place would n’t be any societal opposition unless they get involved in any anti societal activities. Furthermore, during the inundations in Gujarat, the Cello group had financed sheds for cows ‘s which is socially is considered as a really good work. This would add to the good will of the organisation.

On the other manus, Cello produces a scope of merchandises which are low-cost to all categories of the society. Therefore socially there is non much opposition to Cello merchandises.

Technological

The Managing Director of Cello, he stated that they have been continuously puting in new engineerings for the intent of bettering their operational efficiency.

The modeling machines they use are from one of the best known trade name “ Larsen & A ; Toubro. These machines are really expensive and extremely known for their efficient working. Furthermore, the injection modeling dyes that they use are imported from Korea and are known for preciseness.

Harmonizing to Cellopen.com, they besides involve in R & A ; D for developing in-house engineerings. Recently they developed a Low Pressure High Volume ( LPHV ) engineering which ensures superior composing. Thus technologically they are really sound and have been invariably puting in new engineerings. Sing the macro environment chances of Cello exceed the menaces. Thus Cello has a good range to capitalize on the available chances which would assist them in beef uping their market place.

2.b ) Cello ‘s internal working and it ‘s relation to efficiency:

Value concatenation theoretical account is used for the intent of analyzing the internal working of Cello ‘ and to understand its relation with efficiency. Understanding Cello ‘s internal working and its relation with efficiency would assist in analyzing the competitory advantages that have helped Cello be in front in the competitory scenario. Following is the diagrammatic representation of the value concatenation theoretical account:

Harmonizing to the value concatenation, the internal activities of an administration are divided into primary and secondary. Following is the brief treatment of primary activities in relation to Cello:

§ Inbound Logisticss:

In instance of inbound logistics Cello has immense warehouses, trucks and fork lifter for the intent of managing natural stuff. This helps them in pull offing their stock expeditiously and therefore helps in faster production planning.

§ Operationss:

Cello is considered a really tech understanding company when it comes to their production installation. They have been known for attempt freshly invented engineerings and their machinery are ever from one of the best trade names. The injection modeling machines used by Cello are from Larsen and Turbro which is the taking company maker of injection modeling machinery. Furthermore, their natural stuff comes from Reliance industries, India and Sumitomo Japan. They are besides considered the best in their concern. Harmonizing to cellopens.com, the tips of their pen are made of Nickel-Silver metal which is considered the best metal for doing good tips. In instance of quality control, they are so rigorous, that their rejection per centum is ever at 0.1 % . [ cellopens.com, 2009 ]

§ Outbound Logisticss:

In instance of outbound logistics, there is nil much cello does. Like the other makers they besides use truck and lorry services provided by conveyance companies.

§ Marketing & A ; Gross saless

As discussed above Cello uses aggressive selling scheme. This scheme had helped them to come in the pen market and besides complement them in going the market leaders. Furthermore, their aggressive scheme was supported by invention and good quality merchandises. Thus selling and gross revenues are really expeditiously managed.

§ Service:

There is non much service that Cello can supply to its consumers because they serve the mass market. But on the rear of their wadding they ever mention their contact inside informations in instance of any job with the merchandises. Thus it can be a confidence that the company would listen in instance of any grudges.

Following is the analysis of the secondary activities:

§ Procurement:

This activity is in direct relation with the inputs required for merchandises fabricating. Their chief natural stuff is PP granules. They chiefly buy them from Reliance Industries but in instance or deficit they even buy it from Sumitomo, Japan. So the direction makes it certain that they wo n’t fall abruptly of their basic natural stuff.

§ Technology Development:

Technological development is in direct relation to the operation activities. As discussed above Cello uses injection modeling machines made by Larsen and Turbro, which are considered the best in all the available trade names. Furthermore they have developed of import engineerings like chip authorship and low force per unit area high volume which helps them in supplying good quality authorship.

§ Human Resource direction:

In the interview conducted with Mr Pradeep, the MD of Cello, he said that there is no specific scheme that they use. He says that it ‘s the whole system that is in topographic point and they manage human resource as the state of affairs demands. Furthermore he added that they maintain individual to individual relation with directors which acts as a beginning of motive.

§ Infrastructure:

“ The system of planning, finance, quality control, information direction, etc are crucially of import to an administrations public presentation in its primary activities. ” ( Gerry Johnson, Kevan Scholes, 2002 )

In footings of finance, Cello is a really hard currency rich company and they have ample fund for back uping its primary activities. Quality is an country in which Cello specialises and this can be seen because of the demand for their merchandises.

From the above it can be seen that Cello has a really good linkage between its primary and secondary activities. In each country Cello has tried to specialize which in return has resulted in efficiency which can be seen in their public presentation in the market.

The above was a elaborate description sing the followers:

• Market place of Cello
• The pen industry in India
• Internal operation of Cello and its linkage with the organizational aim.

From the above it can be said that Cello has created competitory advantage in a figure of cardinal sector which has enabled them to accomplish market leading. In order to demo the connexion of Cello ‘s market leading with long term sustainability the research worker would wish to utilize the Harvard Business Reviews ( HBR ) theory of FIT in their article called “ What is scheme? ”

Harmonizing to HBR ab initio directors considered placement of a company in the market as a scheme. This theory was rejected because with altering clip it was seen that anyone could copy a market place. Later directors considered operational efficiency as a scheme. But this theory was argued with the point that supplying better value and something to consumers is besides of import. Harmonizing to the Harvard Business Review “ A company can surpass challengers merely if it can set up a difference that it can continue ” ( Harvard Business Review, 1996 ) . In instance of Cello, they have achieved both place and operational efficiency. This can be said because they are market leaders and have a really advanced and sound fabrication installation. Furthermore, compared to others in the market, their fabrication capacity is considered the largest.

Sustainability in relation to alone activities was the following construct that was given importance. Harmonizing to HBR “ The kernel of scheme is taking to execute activities otherwise than the challengers do ” . IKEA would be a good illustration to understand the above construct. IKEA is happy to function client who would merchandise off service for cost. This thought was considered of import but the contradiction was that an organisation needs to merchandise off. This gave birth to a new construct which puts visible radiation on the thought that “ tradeoffs are indispensable to scheme. They create the demand for pick and purposefully restrict what a company offers. ” ( Harvard Business Review, 1996 ) If we consider the above three constructs, Cello ‘s scheme walks in line with the above three constructs.

They have reached the place of market leading, operational efficiency has been one of the cardinal countries in their scheme and their manner of come ining the pen market was alone as they used aggressive market. In instance of tradeoffs, Cello has merely concentrated on composing instruments in the immense skyline of the merchandise scope available in the letter paper market. This has helped them in accomplishing market leading. Thus it can be said that Cello has created competitory advantage and have besides achieved long term sustainability for keeping their market leading position.

In the concluding phase, HBR states that long term scheme for sustainability in the market calls for accomplishing FIT. “ Fit locks out impersonators by making a concatenation that is every bit strong as its strongest nexus ” . ( Harvard Business Review, 1996 ) A farther account of tantrum would state that when one activity would supply value to clients, it should be complemented and enhanced by other activities. From Cello ‘s point of position, it can be seen that they have linked all the elements really good which has enabled them to accomplish market leading.

These elements are: technologically advanced fabrication installation, immense finance, immense work force, Quality control, advanced thoughts, first-class distribution system and aggressive selling. Furthermore if we see the positive sides of Cello variegation scheme, it would be clear that since they have entered the letter paper market, composing instruments have been their country of concentration. This has helped them making a niche because of their distribution web, quality control and advanced thoughts. Knowing the fact that rival ‘s merchandises are really similar to Cello merchandises, it was still possible for them to make this niche. Thus it would be right to reason that Cello has all the elements that the current market state of affairs requires from a company to go market leaders.

Importance of Product Development and Innovation:

Harmonizing to bized.co.uk “ Research has indicated that the direction of the new merchandise development and invention procedure is perceived by senior directors as critical to long term success ( nevertheless that is defined ) . In today ‘s markets, with increased entree to information and quickly diminishing merchandise lifecycles, the direction, development and selling of a company ‘s merchandise are even more critical. “ [ bized.co.uk, 2009 ]

The above is a really of import statement which can assist in understanding the nexus between merchandise development and invention. From a new entrant ‘s position, come ining a concentrated market with regular merchandises or services would n’t do much difference to the market nor would assist them in deriving an easy entry. The illustration of Gerald Ratner would be a good illustration. He came up with the advanced thought of on-line jewelry retailing which gave him an immediate entry in the market.

From Cello ‘s position, invention in context of new merchandises development was one of the most of import scheme ‘s used by them to guarantee an easy entry in the pens market. They introduced pens with gum elastic clasp which made their merchandises different for the current tendency in the market.

Harmonizing to the research worker, merely by introducing an thought would n’t do any one successful in the market. Invention has to be complemented by quality control, advertisement and an efficient web of distribution. In a state of affairs, if a company manufactures something advanced but does n’t utilize effectual distribution would intend that they have non harvested their thought decently. In instance of Cello, their gripper engineering was marketed, advertised and distributed all over the state which made it possible for consumers to do usage of the invention.

Branding

The construct of stigmatization can be referred as an consequence of ferocious competition. Initially branding was merely a demand to distinguish merchandises of one company from another, but with clip sellers saw that consumers started recognizing merchandises with their trade name name. This made seller realised the demand of making an effectual trade name. Now trade name are indexs of the good will and repute a company holds. Designing and implementing an effectual stigmatization scheme could be legion. A really good illustration of merchandise being referred as with its trade name name would be Colgate in India. Peoples are in such a wont of the merchandises that the word toothpaste is ne’er used. Brushing is ever referred as “ have you done Colgate ” .

Different writers have different definitions for trade names. Following are a few definitions which would give an penetration what trade name is? Celebrated selling writer Philip Kotler reckons trade name a factor which helps consumers recognise merchandises of a specific marketer or a groups of marketer. Following is the definition of trade name harmonizing to Kotler:

“ A name, term, symbol or design ( or combination of them ) which is intended to mean the goods or services of one marketer or groups of Sellerss and to distinguish them from those of the rivals. ” ( Groucutt, 2005 )

Harmonizing to the writer, the above definition negotiations more about the physical cues related to branding. So this means whenever a individual gives a merchandises or scope of merchandises a name, term, symbol or design it would go a trade name. This does n’t truly give a full penetration on what precisely branding is? The definition is non backed by properties like quality, distribution, handiness of merchandises on the market, etc.

Kevin Lane Keller, in his book Brands and Brand Management states that “ Rehearsing directors refer to trade name as more than a name, logo, symbol, bundle, design or other properties that identify a merchandise and distinguishes them from others. “ ( Kevin Lane Keller, 2003 ) . The above statement sounds more practical because it does n’t curtail the trade name to it physical properties. In instance of Cello, their trade name was created over a long clip. They were known for their good quality, effectual distribution and ad runs since the clip they were merely in the family industry.

Mr Pradeep Rathod in the conducted telephonic interview quoted “ the chief ground why their trade name became so celebrated was because ; of the aggressive selling they did in the initial phase. ” The used all signifiers of media, like Television, intelligence documents, magazines, etc. This was backed with advanced merchandises, immense distribution web, good quality, mass graduated table production, etc. ” Aggressive selling in the pen market was a really new construct because no 1 else had done that earlier. So it was something truly new and had a really positive end product for Cello. In order to prolong or beef up their trade name value, Cello should go on with advanced merchandise development, selling schemes, uninterrupted advertisement, etc.

3 Decision

In the above research worker had tried to measure the current place of Cello Pens and Stationery Pvt Ltd to understand their sustainability in the Indian pen market. To understand the above in – deepness the writer would wish to state that the done analysis was on understanding the sustainability of Cello ‘s market leading position and the future range of growing in the market. For this intent the writer has tried to supply a really clear position on the followers:

• Cello ‘s place in the pen market
• Indian pen market and range for growing
• Cello ‘s internal working and its nexus with the organisational aims.
• The schemes used by Cello in relation to their market leading and
• Competitor ‘s schemes to get a bigger market portion.

In the above, the research worker would wish to observe that market leading formed the major subject of treatment. The chief ground is that Cello is at the pinnacle in the Indian pen industry. Thus they merely need to go on their growing by utilizing schemes that would assist them in being in front of rivals. Effectss of ferocious competition on Cello has been discussed from two different point of positions ; that is, Cello might lose market leading or they would go on to be market leaders but market portion would acquire less. Both of the above would hold a really negative consequence on Cello.

From the elaborate analysis of the above points the writer would wish to state the followers:

• Market leading in FMCG market is an look of uninterrupted application of different schemes and programs in the right state of affairs. Innovation and quality betterment signifier the cardinal component in the used schemes.
• Market leading can go a long term position unless sellers do n’t acquire over shadowed by the feeling of over assurance.
• Cello is in a really strong place because of their current substructure in fabrication and distributions, quality merchandises and aggressive selling.
• Pen market is really unfastened and any company holding good capacity to put can come in the pen market. Therefore new entrants are a menace for set participants in the pen market.

4 Mentions

Book Mentions

• M. Saunders, P. Lewis & A ; A. Thornhill 2007, Research Methods for Business Students, Fourth Edition, Pearson Education Ltd. , England
• Sarantakos, 2005, Social Research, 3rd edition, Palgrave Macmillan, New York
• Jonathan Groucutt, 2005, Foundations of Marketing, 1st Edition, Palgrave Macmillan, New York
• FMCG and Loyalty, Direct Mail Information Service, 2001, the Compact Group, Pg no 3
• Steven J. Skinner, 1998, Marketing – Entire Quality direction, All India Publishers & A ; Distributors, Chennai
• Kevin Lane Keller, Strategic Brand Management, 2nd edition, Prentice Hall of India Pvt Ltd, 2003
• The Marketing Society Forum, 30th January 2008, Is it possible for trade names to market ethically, Haymarket trade name media, United Kingdom.
• Roger D Blackwell, Paul W Miniard, James F. Engel, 2001, Consumer Behaviour, 9th edition, Southwestern Thompson Learning.
• Kotler, Keller, Koshy, Jha, 2007, Marketing Management – A South Asiatic Perspective, 12th edition, Delhi, Dorling Kindersley ( India ) Pvt Ltd
• Dagmer Recklies, 2001, Porters 5 Forces, Recklies Management Project GMBH, Unknown
• Gerry Johnson, Kevan Scholes, 2002, Researching Corporate Strategy, 6th Edition, Prentice Hall, England
• Harvard Business Review, 1996, What is Strategy, Publisher Unknown.

Online Mentions

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• Sayanati Banerjee, 25th November 2008, Down the memory lane with Cello group Chairman, [ online ] Available at URL hypertext transfer protocol: //economictimes.indiatimes.com/News/News_By_Industry/Cons_Products/Durables/Down_the_memory_lane_with_Cello_Group_Chairman/articleshow/3753299.cms
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