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Manqoosh ur Rehman is In the 2010 annual sales meeting of Shaheen Ballpoints, Mr Zahid, the General Manager of
an Assistant Professor Sales & Marketing, expressed his disappointment with his sales and marketing team’s
based at the School of performance. A meeting with the Board of Directors (BoD) of the Shaheen Group was
Business & Economics, scheduled for the following month, and Mr Zahid had to come up with answers to the
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University of Management
possible questions that he expected the BoD of the group to raise.
& Technology, Lahore,
Pakistan. At the operational level, he had several questions he wanted answered for the future of
Sarwar M. Azhar is a Shaheen Ballpoints including: How should it gain its position back in the market? What
Professor based at the product lines should be offered? Which packaging scheme should be used for its
School of Business & products? Which marketing channels should be used to distribute its products in the
Economics, University of market? Which promotional techniques should be used to promote its products in the
Management &
market? But the most significant and critical question was whether this was a right business
Technology, Lahore,
for the Shaheen Group and should it continue the ballpoint business?
Pakistan.
DOI 10.1108/EEMCS-10-2013-0199 VOL. 4 NO. 4 2014, pp. 1-18, © Emerald Group Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1
The Shaheen Group experienced a mega launch of its ballpoint pens range in 2002. The
major focus of its launching campaign was on its innovative gel-based technology
introduced for the first time in Pakistan. The wholesale market of Pakistan welcomed
Shaheen Ballpoints quite generously, as they paid in advance for their stocks, usually not
the normal business practice of the writing instruments industry of Pakistan.
The Shaheen Group had to pull its stocks after just six months of its mega launching in the
market due to technical and marketing issues. As a result, all the major resellers avoided
Shaheen’s stocks, and this was a major setback for the Shaheen Group.
Launched in 2002, Shaheen Ballpoints had vast experience of doing business in Pakistan
in the fields of sanitary wares and ceramics. Shaheen entered the market by introducing the
innovative gel-based ballpoint pens for the first time in Pakistan. At the launch, it was
expected to grab a major share of the market because of this innovative offering. Shaheen
was able to attract resellers, especially wholesalers, to order for its products. At the time of
the launch, Shaheen offered different writing products in the market (Tables I and II).
As compared to the industry’s standard bulk packing quantities, the Shaheen Group opted
for a new system of packaging for its products. The packing quantities for the industry and
the Shaheen Group at the time of its launch are given in the above table.
The writing instruments industry of Pakistan, which was primarily operating at a no frills cost
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leadership strategy, compelled the Shaheen Group to enter the market in 2002. It had to
compete with the giants such as Sayyed Engineers, Dollar Industries, Shahsons and Indus
Pencils who had benefitted from their presence in the market for decades with a strong brand
image and a large customer base. The Shaheen Group believed that it would challenge the
established positions of the market giants in the writing instruments industry of Pakistan with its
unique gel-based technology in ballpoint pens.
Soon after its launching, Shaheen realized some of the technical and marketing issues in
its systems and had to pull all its stock from the market just after six months of its launch.
They re-launched them in early 2004 with details given in Table III.
Since its re-launch in the market, Shaheen has been struggling to gain back the popularity
and market share it achieved at the time of its initial launching. Currently, Shaheen is
producing 7-8 million pieces of writing instruments per day. The percentage share of each
product type is given in Table IV.
The majority of the production of Shaheen Ballpoints is now being exported. The
percentage share of local and international markets with importing countries is given in
Table V.
Table II Packing quantities comparison of the Shaheen Group and the industry
Basic packing quantity Bulk packing quantity
Category Industry Shaheen Group Industry Shaheen Group
Ballpoint pens 50
Fiber-tip markers 30
Fine-liner pens 5
Gel pens 5
Permanent markers 5
Whiteboard markers 5
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Local 25
International 75
Afghanistan 60
The UAE 40
2.1 Manufacturing
Ballpoint pens are made to be stored in mass quantities. While each manufacturer makes
them slightly differently, the basic steps include ink compounding, metal component
formation, plastic component molding, piece assembly, packaging, labeling and shipping.
However, instead of producing ink and metal components, some of the manufacturers in
Pakistan buy them from open market or import them from international suppliers and use
them in their ballpoint pen manufacturing.
Ballpoint pens 45
Lead pencils 25
Fiber-tip pens and markers 15
Fountain ink pens 5
Gel pens 5
Others 5
dimensions of the specific pen. The pen pieces are next polished by rotating brushes and
cleaned again to remove any residual oils. The ball can then be inserted into the point cavity.
2.1.3 Molding the housing. The plastic components of the pen are constructed
simultaneously with the other pen pieces. They can be produced by either extrusion or
injection molding. In each approach, the plastic is supplied as granules or powder and is
fed into a large hopper. The extrusion process involves a large spiral screw, which forces
the material through a heated chamber, making it a thick flowing mass. It is then forced
through a die, cooled and cut. Pieces such as the pen body and ink barrel are made by this
method.
For pieces that have more complex shapes, like caps, ends and mechanical components,
injection molding is used. In this process, the plastic is heated, converting it into a liquid
that can then be forcibly injected into a mold. After it cools, it solidifies and maintains its
shape after the die is opened.
2.1.4 Ink filling and assembly. After the components are formed, assembly can take place.
Typically, the ballpoint is first attached to the ink reservoir. These pieces are then
conveyored to injectors, which fill the reservoir with the appropriately colored ink. If a spring
is going to be present, it is then placed on the barrel of the reservoir.
2.1.5 Final assembly, packaging and shipping. The point and reservoir are then placed
inside the main body of the pen. At this stage, other components such as the cap and ends,
are incorporated. Other finishing steps, such as adding coatings or decorations or
performing a final cleaning, are also done. The finished pens are then packaged according
to how they will be sold. Single pens can be put into blister packages with cardboard
backings. Groups of pens are packed into bags or boxes. These sales units are then put
into boxes, stacked in cartons and shipped to distributors.
Out of all the steps of the production process, only the last step is performed by many
organizations in Pakistan as the major portion of the production process is outsourced from
China and the parts are brought into Pakistan and then assembled. Only a few companies
(including Sayyed Engineers, Dollar Industries, Shahsons and Indus Pencils) have the
capability to perform the entire production process in Pakistan. These companies also own
the country’s leading writing instruments brands (Piano, Dollar, Goldfish, Picasso and
Deer). Writing instruments companies, other than those listed above, have outsourced
much of their production process. The details of different companies performing different
production processes are given in the Table VII.
Sayyed Engineers Both in-house and Both in-house and In-house In-house In-house
outsourced outsourced
Dollar Industries In-house Both in-house and In-house In-house In-house
outsourced
Shahsons Both in-house and Both in-house and In-house In-house In-house
outsourced outsourced
Indus Pencils Both in-house and Both in-house and In-house In-house In-house
outsourced outsourced
Mark Industries Outsourced Outsourced In-house In-house In-house
Shaheen Ballpoints Outsourced Outsourced In-house In-house In-house
5,000
World
4,000
3,000 China
2,000 Indonesia
1,000 Thailand
0 Chinese Taipei
2006 2007 2008 2009 2010
5,000
World
4,000
3,000 China
2,000 Indonesia
1,000 Thailand
0 Chinese Taipei
2006 2007 2008 2009 2010
5,000
World
4,000
3,000 China
2,000 Indonesia
1,000 Thailand
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0 Chinese Taipei
2006 2007 2008 2009 2010
5,000 World
4,000 China
3,000
Indonesia
2,000
Thailand
1,000
Chinese Taipei
0
2006 2007 2008 2009 2010 Germany
Table VIII Export performance of the writing instruments industry of Pakistan for HS 9608
code
Exports value (US$ thousands)
Leading importers 2006 2007 2008 2009 2010
Table IX Export performance of the writing instruments industry of Pakistan for HS 9609 code
Exports value (US$ thousands)
Leading importers 2006 2007 2008 2009 2010
Table X Import performance of the writing instruments industry of Pakistan for HS 9608 code
Imports value (US$ thousands)
Leading exporters 2006 2007 2008 2009 2010
Table XI Import performance of the writing instruments industry of Pakistan for HS 9609 code
Imports value (US$ thousands)
Leading exporters 2006 2007 2008 2009 2010
Table XII Cumulative international trade performance of the writing instruments industry of
Pakistan
Total value (US$ thousands)
Year Exports Imports Trade balance
20,000
15,000
10,000
Exports
5,000
Imports
0
Trade Balance
2006 2007 2008 2009 2010
−5,000
−10,000
−15,000
system and customer loyalty and claim to retain these features through the quality of their
products. Indus Pencils owns one of the leading lead pencil brands of Pakistan, Deer. The
product details offered by Indus Pencils are given in Table XVII.
2.6 Pricing
Retail prices of ballpoint pens tend to be the same throughout the industry. All the major brands
sell their ballpoint pens for roughly the same amount in specific category prices. A low-quality
ballpoint pen has the price of 3 rupees. A medium-quality ballpoint pen is available for 5 rupees
and a good-quality ballpoint pen is available for 10-15 rupees. The price ranges of major
product categories in the writing instruments industry are given in Table XIX.
The price ranges given above indicate a wide range of choices available to different segments
according to their requirements and affordability. There are some prime quality writing instruments
available in the market but most of them are imported from Germany, the UK and China.
Table XVIII Market segmentation for the writing instruments industry of Pakistan
Usage purpose Segmentation on the basis of
Segment Sub-segment Products Age Gender Income
2.7 Distribution
While there are various types of distribution channels available in the writing instruments
industry of Pakistan, the major resellers are distributors, dealers, wholesalers and retailers.
The responsibilities and benefits enjoyed by each of the resellers in the writing instruments
industry of Pakistan are given in Table XX.
Companies in the writing instruments industry of Pakistan are using different channels
to distribute their products. The majority of companies are using multiple distribution
channels to ensure the availability of their products in the market. The distribution
systems of major companies in writing instruments industry of Pakistan are given in
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Table XXI.
Distributor Distribution of products into a specific geographic area is the responsibility of the
distributor
It is the responsibility of the distributor to ensure the availability of all the products
of company by maintaining a sufficient amount of safety stock
Distributor acts as an authorized agent of the company
Company has an advantage of availability of products throughout a specific region
without the presence of a large sales team
Credit risk of company is minimized as distributor is responsible to provide credit
to wholesalers and retailers
Distributor has an advantage of credibility of carrying a brand solely in the
designated market and can leverage the credibility by offering other products in
the market
Net profit margin is 5-7%
Transaction volume is high
Dealer Dealer maintains the stock of different products but is not limited to a single
company
Dealer acts as an authorized agent of the company but is not a sole one
Generally two to three dealers are appointed in a city
Although the dealer is not responsible for the distribution of products, availability of
products is ensured at the dealer’s outlet
Net profit margin is 5-7%
Transaction volume is medium
Wholesaler Wholesaler is not bound to any company for maintaining any stock or carrying all
the product range of the company
Wholesaler looks out for his own benefit and tries to cut prices of running items to
increase sales volume
Net profit margin is 3-5%
Transaction volume is medium
Retailer Retailer is the one who is in direct connection with the end user
Retailer carries multiple brands and multiple product lines
Generally retailers keep switching brands being pushed by them to maintain their
working relationships with all the companies available in the market. Thus, while
focusing on one brand to be pushed, retailers do not ignore the other competing
brands
Net profit margin is 15-20%
Transaction volume is low
The major emphasis of almost all the companies is on wholesale markets. There are three
major markets in Pakistan dealing in wholesale trading of writing instruments. These are:
2.8 Promotion
Although some of the above-the-line (ATL) activities are exercised by all the major
companies in the writing instruments industry of Pakistan, a major emphasis is generally on
below-the-line (BTL) activities for most of the companies to promote their products. The
details of promotional activities currently being exercised by some of the major companies
in the industry are given in Table XXII.
At the time of its launch, Shaheen used shop hoardings, neon signs in wholesale markets and
buntings to create awareness among the target customers. It also planted stalls in the
wholesale markets to make people aware of its products. The focal point of the whole launching
campaign was based on its unique attribute of the first gel-based ballpoint pen in Pakistan.
Price of ballpoint pens is quoted in terms of a box of 10 pieces or in terms of 100 pieces
or for bulk customers in terms of carton of 2,000 pieces.
Generally companies offer a credit of 15-45 days to the major resellers to facilitate them
in maintaining their stocks.
Companies in the writing instruments industry generally use multiple distribution
channels with different channel levels which involve distributors, dealers, wholesalers
and retailers.
The major focus of the companies operating in the writing instruments industry of
Pakistan is on BTL promotional activities. Companies do exercise ATL activities with
minimal or no presence on broadcast media.
Notes
1. To maintain the anonymity, the name of the organization and group under discussion has been
changed. The figures presented in the case regarding different individual companies are fictional
and do not represent any individual. This case is presented for class discussion and does not reflect
good or bad business practices.
2. Ballpoint pens use oil-based viscous inks which are high in viscosity. These inks faced the problem of
Keywords: dryness in cold weather. When reduced in viscosity level, these inks tend to leak because of their
Writing instruments, oil-based properties. Shaheen introduced gel technology in ballpoint pens by inserting a small amount
Strategy, of transparent gel (approximately 1 inch) at the back of the ink barrel of the ballpoint pens. This gel
maintained a pressure pushing the ink toward the roller ball point of the pen resulting in better writing
Marketing strategy flow. This gel also stopped the leakage problem caused in hot weather from the back of the ink barrel.
Corresponding author
Manqoosh ur Rehman can be contacted at: manqoosh.rehman@gmail.com