Clique Pens: The Writing Implements Division of U.S. Home Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Clique Pens: The Writing Implements Division of U.S. Home

Problem Statement

Clique Pens founded in 1922 and it US Home division is founded in the year 1978 by Bob Utley. Under Us Home division Clique has grown steadily and by the end of the year 2013 it is expected to be a worldwide selling brand. Sales of the company is increasing continuously, but in line with the sales its marketing expenses are also increasing which results in the decline of profit margin from 42% to36% by the end of the year 2012. Approximately more than 80% of the total sales are expected to be driven by retailers, and increase in the ratio of discounts and allowances decreasing the profit margin of the company and the President of the US Home division is considering to adopt a suitable strategy regarding Market Development funds so that company could achieve its primary goals.

Analysis of Marketing Strategy

In order to attain more market share and increase profitability company is spending a huge amount in term of marketing and sales expense. It is expected that company is spending 15% of the total promotional budget on advertising, 30% on consumer promotions and 55% on trade promotions.

Company is spending more than 50% of the promotional budget on trade promotions as it is the main source of sales and profit margins.As there is more competition in the market and more than 50 competitors are operating in industry like BIC and Pilot. It is expected that all major competitors are also using same ratio with respect to the promotional budget as it is the need of the companies in order to increase their market share. (JA Czepiel, n.d.)

Situation Analysis

Company is facing the problem of decrease in profit margins instead of increase in sales as increase in sales are also increasing promotional and sales expenses with greater ratio. There is an intense competition in the market and all competitors are following the price war strategy in order to attain greater market share as compared to its competitors as it is the only source of generating greater profit margin. (Raghubir, 2004)

Customer Analysis

The Writing industry has not affected by the electronic communication and it is expected that increase in population will increase in demand of pen and pencils by 2%. But as compared to other industries writing industry has different characteristics. It is expected that there is very low level of brand loyalty among customers. Buying behavior of the consumers is mostly influenced by retailers and promotional activities from the retailers and manufacturers. (Oswal, 2014)

4Ps Analysis

Marketing is about positioning the right product in right places in order to meet the market and customers demand in right time and with their affordable spending level. Clique is operating worldwide and it US division is saturated with more than 50 multinational competitors. With respect to the market conditions as there as an intense price war between the rivals, company is also following the low pricing strategy.Clique Pens The Writing Implements Division of U.S. Home Case Solution

As today’s era is of technology and customers have become more sophisticated therefore company is also focusing on its Product designs, styles and innovation as Clique pens are famous for utilitarian designs. In addition to this Clique secret sauce formula also helps the company in order to achieve competitive advantage over its competitors. Inorder to attract more customers company is spending a huge amount upon promotional and sales activities like its competitors as it is the main source of revenue generation and market share acquisition.

In order to facilitate the customers Clique products are available at each retail store and retail store chains like Wal-Mart. Getting shelf place in a large retail store is very difficult as there is intense competition in the market but Clique maintained a good relationship with its retailers and distributors. (Londre, 2007)................................

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