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Emerald Emerging Markets Case Studies

Shaheen Ballpoints: a project of the Shaheen Group[1]


Manqoosh ur Rehman Sarwar M. Azhar
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To cite this document:
Manqoosh ur Rehman Sarwar M. Azhar , (2014),"Shaheen Ballpoints: a project of the Shaheen Group[1]", Emerald
Emerging Markets Case Studies, Vol. 4 Iss 4 pp. 1 - 18
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Shaheen Ballpoints: a project of the
Shaheen Group[1]
Manqoosh ur Rehman and Sarwar M. Azhar

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.

1. Shaheen Group’s entry into the writing instruments industry of Pakistan


The Shaheen Group was successful in many diversified businesses in Pakistan and in its ability
to enter into related and unrelated businesses and to apply innovative methods in launching
and marketing new products. Over the years their interest had been growing in entering the
writing instruments industry of Pakistan. The writing instruments industry, enjoying the growth
stage in Pakistan, was an attractive venture for a powerful business group such as Shaheen
who planned to launch itself in this industry in 2001-2002. The Shaheen Group had to compete
head-on against established national writing instruments brands including Piano, Dollar,
Picasso, Goldfish and Deer. The group’s top management aimed to replicate the success of
Shaheen Tiles by adopting new packaging and distribution strategies for an innovative
product, gel-based ballpoint pens, in the writing instruments industry. The Shaheen Group
believed that it could create a successful writing instruments venture by applying the same
principles that had worked for them in the Shaheen Tiles business.
Because ballpoint pens are the major type of writing instruments produced by the industry, the
Shaheen Group decided to enter the market by introducing their ballpoint pens first. The
Shaheen Group believed that by setting new standards for technology and packaging being
used in the writing instruments industry, they would be able to compete with the giants in the
Disclaimer. This case is written market. They decided to use the gel pen technology[2] in Ballpoint pens to get an advantage
solely for educational
purposes and is not intended
over other ballpoint pens in the market who were contending with issues of writing flow and ink
to represent successful or leakage. They also decided to introduce 12 ballpoint pens in a standard card box at the same
unsuccessful managerial
decision making. The author/s
price of a 10 ballpoint pen box offered by all other companies. Shaheen believed that by
may have disguised names; introducing gel technology in ballpoint pens for the first time in Pakistan, and offering two
financial and other
recognizable information to
additional ballpoint pens in a pack, they would be able to attract retailers and wholesalers and
protect confidentiality. encourage them to prefer their brand over the established ones.

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 I Product categories of Shaheen Ballpoints (Old)


Category Packing quantity (pieces) Packaging

Ballpoint pens 12 Cardboard box


Fiber-tip marker 12 Cardboard box
Fine-liner pen 12 Cardboard box
Gel pens 12 Cardboard box

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 10 pieces/box 12 pieces/box 200 boxes/carton 12 boxes/inner and 20 inners/carton


Fiber-tip markers 10 pieces/box 12 pieces/box 200 boxes/carton 12 boxes/inner and 20 inners/carton
Fine-liner pens 12 pieces/box 12 pieces/box 200 boxes/carton 12 boxes/inner and 20 inners/carton
Gel pens 10 pieces/box 12 pieces/box 200 boxes/carton 12 boxes/inner and 20 inners/carton

PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014


Table III Product categories of Shaheen Ballpoints (New)
Category Packing quantity (pieces) Packaging

Ballpoint pens 10 Cardboard box


Fiber-tip markers 10 Cardboard box
Fine-liner pens 12 Cardboard box
Gel pens 10 Cardboard box
Permanent markers 12 Cardboard box
Whiteboard markers 12 Cardboard box

Table IV Product categories share of Shaheen Ballpoints


Product category Percentage share (%)

Ballpoint pens 50
Fiber-tip markers 30
Fine-liner pens 5
Gel pens 5
Permanent markers 5
Whiteboard markers 5
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Table V Major markets of Shaheen Ballpoints


Market Percentage share (%)

Local 25
International 75
Afghanistan 60
The UAE 40

2. The writing instruments industry of Pakistan


In Pakistan, writing instruments are classified into different groups as shown in Table VI.
Ballpoint pens are the major type of writing instruments and account for about 45 per cent
of the total writing instruments industry, followed by lead pencils with a share of about 25
per cent. The production process of ballpoint pens along with the sales, marketing and
distribution systems of the industry are explained below for a better understanding of the
industry dynamics.

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.

Table VI Share of different product types in writing instruments industry of Pakistan


Category Approximate share in the writing instruments industry (%)

Ballpoint pens 45
Lead pencils 25
Fiber-tip pens and markers 15
Fountain ink pens 5
Gel pens 5
Others 5

VOL. 4 NO. 4 2014 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3


2.1.1 Ink making. Large batches of ink are made in a designated area of the manufacturing
plant where workers, known as compounders, follow formula instructions to make batches
of ink. Raw materials are poured into the batch tank and thoroughly mixed. Depending on
the formula, these batches can be heated and cooled as necessary to help the raw
materials combine more quickly. Some of the larger quantity raw materials are pumped and
metered directly into the batch tank.
2.1.2 Stamping and forming. While the ink is being made, the metal components of the pen
are being constructed. The tungsten carbide balls are typically supplied by outside
vendors (mainly from Germany) and other parts of the pen, such as the point and the body,
are made using various molds. First, bands of brass are automatically inserted into
stamping machines, which cut out thousands of small discs. The brass discs are next
softened and poured into a compression chamber, which consists of a steel ram and a
spring-backed ejector plunger. The steel ram presses on the metal, causing the plunger to
retract and forcing the metal into a die cast mold. This compresses the metal and forms the
various pen pieces. When the ram and plunger return to their original positions, the excess
metal is then scraped off and recycled. The die is then opened, and the pen piece is
ejected.
The formed pieces are then cleaned and cut. They are immersed in a bath to remove the oils
used in the molding process. After they emerge from the bath, the parts are then cut to the
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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.

PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014


Table VII Details of different manufacturing functions performed by major players of the industry
Ink filling Final assembly,
Stamping and Molding the and packaging and
Company Ink making forming housing assembly shipping

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

2.2 International trade performance


Pakistan’s writing instruments industry is also involved in the international trade. The following
international trade figures were obtained from the International Trade Centre’s (ITC) Trade
Statistics for International Business Development. The data were classified on 4-digit level
harmonized system (HS) codes. HS codes classify writing instruments under two categories:
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1. 9608 ballpoint pencil; markers and writing instruments and


2. 9609 pencil (other than ballpoint and pencils classified under 9608), pencil leads and
chalks.
The data indicate the export and import performance of Pakistan under both categories
separately in the five years from 2006 to 2010. A decreasing trend was obvious in the
exports of both the categories of writing instruments from 2006 to 2009. However, a
recovery was indicated by export figures of 2010 (Figures 1 and 2).
Conversely, the import data indicate an alarmingly increasing pattern of import of both the
categories of writing instruments for the past five years. China, being the largest exporter

Figure 1 Export performance of the writing instruments industry of Pakistan for HS


9608 Code

5,000
World
4,000
3,000 China
2,000 Indonesia
1,000 Thailand
0 Chinese Taipei
2006 2007 2008 2009 2010

Figure 2 Export performance of the writing instruments industry of Pakistan for HS


9609 Code

5,000
World
4,000
3,000 China
2,000 Indonesia
1,000 Thailand
0 Chinese Taipei
2006 2007 2008 2009 2010

VOL. 4 NO. 4 2014 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5


of writing instruments to Pakistan, dominates the writing instruments market of Pakistan.
The imports from China not only have decreased the local market share of Pakistani
manufacturers but have also posed a major threat to Pakistani manufacturers of writing
instruments in the export market (Figures 3 and 4).

2.3 International trade opportunities


Tables VIII and IX below highlight the export performance of the writing instruments
industry of Pakistan in both the categories identified above. These tables indicate the total
exports of writing instruments from Pakistan to different importing countries of the world with

Figure 3 Import performance of the writing instruments Industry of Pakistan for HS


9608 Code

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

Figure 4 Import performance of the writing instruments industry of Pakistan for HS


9609 Code

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

World 3,764 2,791 2,540 2,839 3,179


The United Arab Emirates 1,715 1,449 819 880 865
Afghanistan 271 255 407 714
Madagascar 127 85 97 99 203
Kuwait 39 98 154 158 173
South Africa 5 5 0 30 158

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

World 882 1,284 1,814 1,181 1,735


Brazil 128 478 770 500 474
The United Arab Emirates 124 259 343 286 336
Turkey 91 30 298 159 336
Egypt 213 285 144 87 295
Yemen 0 7 1 0 100

PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014


UAE and Brazil being the top importers of writing instruments under HS 9608 and HS 9609,
respectively, from Pakistan.
Tables X and XI, on the other hand, highlight the import figures of Pakistan’s writing
instruments industry under both the identified categories. These tables indicate the total
imports of writing instruments in Pakistan from different exporting countries of the world with
China being the largest exporter of writing instruments for Pakistan in both the categories
of writing instruments.
These tables along with Table XII below clearly highlight the potential of Pakistan’s market
in terms of writing instruments consumption. They also indicate an opportunity for Pakistani
manufacturers to replace the imported writing instruments by introducing the local writing
instruments that can compete with the imported ones as highlighted by Figure 5 as well.

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

World 4,243 7,154 7,725 7,865 10,823


China 1,054 3,610 2,992 3,199 5,871
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Japan 722 833 1,268 1,701 2,216


Switzerland 644 924 1105 842 686
Republic of Korea 487 343 377 530 538
Malaysia 104 77 301 778 406

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

World 1.335 3.682 3.398 3.910 3.779


China 1.068 3.325 3.181 3.545 3.413
Indonesia 70 136 55 65 129
Thailand 22 16 51 32 111
Chinese Taipei 27 67 19 57 33
Germany 34 23 32 40 31

Table XII Cumulative international trade performance of the writing instruments industry of
Pakistan
Total value (US$ thousands)
Year Exports Imports Trade balance

2006 4,646 5,578 (932)


2007 4,075 10,836 (6,761)
2008 4,354 11,123 (6,769)
2009 4,020 11,775 (7,755)
2010 4,914 14,602 (9,688)

Figure 5 Cumulative international trade performance of Pakistan’s writing instruments industry

20,000

15,000

10,000
Exports
5,000
Imports
0
Trade Balance
2006 2007 2008 2009 2010
−5,000

−10,000

−15,000

VOL. 4 NO. 4 2014 EMERALD EMERGING MARKETS CASE STUDIES PAGE 7


2.3 Major players of the industry
The writing instruments industry of Pakistan comprises of four major companies (Table XIII).
2.3.1 Sayyed Engineers. Sayyed Engineers is a manufacturer of writing instruments. Since
its establishment in 1965, Sayyed Engineers has consistently committed itself to quality and
innovation in their products and processes. In addition to being one of the largest
producers of writing instruments in Pakistan, Sayyed Engineers has also been exporting
their products to many countries including Holland, Turkey, Cyprus, Iraq, Iran, Syria, Egypt,
Lebanon, Kuwait, Russia, Afghanistan, Jordan, the UAE and Saudi Arabia. Sayyed
Engineers manufacture their products from two factories located in Gujranwala and Bhai
Pheru, whereas its head office is located in Lahore with branch offices located in
Rawalpindi, Peshawar, Multan, Faisalabad and Karachi. It also has an overseas office in the
UAE. The product details offered by Sayyed Engineers are given in Table XIV.
Apart from the product categories that are produced locally, Sayyed Engineers also import
some writing instruments and other stationery items from different countries. The major
international brands in which Sayyed Engineers deals with are:
 Nichiban (Adhesive tapes from Japan);
 Colop (Stamping machines and stamp pads from Austria); and
Stabilo (Highlighter pens from Germany).
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Table XIII Major players of the writing instruments industry of Pakistan


Company Main product categories Major brands Market share (%)

Sayyed Engineers Lead pencils Wings 32


Ballpoint pens Piano
Fiber-tip markers Tempo
Dollar Industries Lead pencils Dollar 26
Ballpoint pens Pointer
Fountain pens
Fiber-tip markers
Permanent markers
Whiteboard markers
Shahsons Lead pencils Goldfish 17
Ballpoint pens Picasso
Color pencils
Indus Pencils Lead pencils Deer 12
Ballpoint pens
Color pencils
Mark Industries Ballpoint pens Mercury 4
Fiber-tip markers Schmuck
Gel pens
Shaheen Ballpoints Ballpoint pens Shaheen 2
Fiber-tip markers
Gel pens
All others including Imported Ballpoint pens Signature 7
Lead pencils Dux etc

Table XIV Product categories of Sayyed Engineers


Packing quantity
Category (pieces) Packaging

Lead pencils 12 Blister pack and poly bags


Color pencils 6 and 12 Aluminum and plastic can and cardboard box
Ballpoint pens 10 Cardboard box
Fiber-tip marker 10 Cardboard box
Fountain pen 12 Cardboard box
Fine-liner pen 12 Cardboard box
Gel pens 10 Cardboard box
Permanent markers 12 Cardboard box
Whiteboard markers 12 Cardboard box
Highlighters 10 Cardboard box

PAGE 8 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014


2.3.2 Dollar Industries. Dollar is a manufacturer of writing instruments and stationery. It was
established in 1954 and is said to be the leading writing instruments company in Asia and
has exported to more than 50 countries in the world. Since its creation, Dollar has been
transformed into a mega brand and also manufactures and exports private labeled
stationery products for some of the leading international brands. The major strength of
Dollar Industries is ink–making, and it is one of the leading and reliable manufacturers of
inks in Pakistan. The product details offered by Dollar are given in Table XV.
2.3.3 Shahsons. Shahsons (Pvt.) Ltd. has been in the manufacturing and marketing of
quality writing instruments since 1953. Based in Karachi, Shahsons claims to be the
pioneer and largest manufacturer of lead pencils in Pakistan. Shahsons keeps introducing
new products and has established two leading brands, Goldfish and Picasso. Their
fundamental goal is to make products that consumers will regularly use, depend on and
enjoy. Their product range facilitates for all age groups from color pencils and crayons for
children to graphite pencils and ballpoints for students and professionals. The product
details offered by Shahsons are given in Table XVI.
2.3.4 Indus Pencils. Indus Pencil Industries is a private limited firm that deals in the
manufacturing and exports of school and office stationery supplies in Pakistan. Established
in 1954, Indus Pencils take pride in its employee’s commitment, its quality assurance
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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.

Table XV Product categories of Dollar Industries


Packing quantity
Category (pieces) Packaging

Lead pencils 12 Blister pack and poly bags


Color pencils 6, 12, 24 and 48 Aluminum and plastic can and cardboard box
Ballpoint Pens 10 Cardboard box
Fiber-tip marker 10 Cardboard box
Fountain pen 12 Cardboard box
Fine-liner pen 12 Cardboard box
Permanent markers 12 Cardboard box
Whiteboard markers 12 Cardboard box
Highlighters 10 Cardboard box

Table XVI Product categories of Shahsons


Category Packing quantity (pieces) Packaging

Lead pencils 12 Blister pack and transparent jar


Color pencils 6, 12, 24 and 48 Aluminum can and cardboard box
Wax crayons 6 and 12 Shrink wrap and cardboard box
Ballpoint Pens 10 Cardboard box

Table XVII Product categories of Indus Pencil


Packing quantity
Category (pieces) Packaging

Lead pencils 12 Blister pack and poly bags


Color pencils 6, 12, 24 and 48 Aluminum and plastic can and cardboard box
Ballpoint pens 10 Cardboard box
Fountain pen 12 Cardboard box
Fine-liner pen 12 Cardboard box
Permanent markers 12 Cardboard box
Whiteboard markers 12 Cardboard box

VOL. 4 NO. 4 2014 EMERALD EMERGING MARKETS CASE STUDIES PAGE 9


2.4 The target market
The market for writing instruments industry is segmented mainly on the basis of usage purpose.
These segments are further divided on the basis of age, gender and income. The detailed
segmentation of the market for writing instruments industry in Pakistan is given in Table XVIII.

2.5 Use of new technology


Pakistan has extremely hot weather conditions which can cause ballpoint pens to have the
problem of leakages. To remove these leakages, ballpoint pen manufacturers increased the
viscosity of ink which has led to another problem of fluency in the extremely cold areas of
Pakistan. This appears to be a big challenge for ballpoint pen manufacturing companies
because both extreme weather conditions simultaneously existed in Pakistan. According to the
R&D work done by leading international ballpoint pen manufacturers, a ballpoint pen’s fluency
could be maintained by using gel at the back of ink barrel, forcing the thick ink to flow
downward, making a ballpoint pen write smoothly and the problem of fluency was removed.
This gel-based technology was first used by the Shaheen Group in ballpoint pens in Pakistan
at the time of its launching.
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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

Educational School Lead pencils Present Present Present


Color pencils
Fountain pens
Ballpoint pens
Fiber-tip markers
Gel pens
College Lead pencils Present Present Present
Fountain pens
Ballpoint pens
Fiber-tip markers
Gel pens
University Ballpoint pens Present Present Present
Fine-liner pens
Gel pens
Office Desk usage Lead pencils Rarely present Rarely present Rarely present
Fountain pens
Fine-liner pens
Ballpoint pens
Gel pens
Highlighters
Professional usage Special lead pencils Absent Absent Absent
Ballpoint pens
Permanent markers
Whiteboard markers

PAGE 10 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014


Table XIX Price ranges for major product categories
Product category Price range/piece

Lead pencils PKR3-PKR5


Ballpoint pens PKR3-PKR5
Fiber-tip markers PKR4-PKR10
Fine-liner pens PKR10-INR25
Gel pens PKR10-PKR25

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.

Table XX Characteristics of resellers in the writing instruments industry of Pakistan


Reseller Characteristics

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

VOL. 4 NO. 4 2014 EMERALD EMERGING MARKETS CASE STUDIES PAGE 11


Table XXI Distribution channels being used in the writing instruments industry of
Pakistan
Companies Distribution channels

Sayyed Engineers Dealers


Wholesalers
Dollar Industries Distributors
Dealers
Wholesalers
Shahsons Regional distributors (responsible for distribution in a large
geographic area, e.g. in a district or in more than one district)
Distributors
Dealers
Wholesalers
Indus Pencils Dealers
Wholesalers
Shaheen Ballpoints Dealers
Wholesalers
Others Dealers
Wholesalers
Retailers
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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:

1. Urdu bazaar Lahore;


2. Urdu bazaar Karachi; and
3. Gawalmandi Rawalpindi.
As these markets have heavy volumes of wholesale trading, writing instruments companies do
not ignore them and try to ensure their presence in these wholesale markets. They design
special packages and offers for these wholesalers to promote their brands through these
markets.

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.

2.9 Overall market practices for writing instruments industry in Pakistan


The writing instruments industry in Pakistan is primarily generating revenues through
pushing the sales with the help of giant wholesalers and distributors of the companies. The
major companies in the industry try to penetrate through the market by offering certain
deals (cash or in kind) to the giant wholesalers so that they can promote their brand.
The general marketing practices, in terms of the 4Ps, for the companies operating in the
writing instruments industry of Pakistan are given below:
 Ballpoint pens are packaged in a card box of 10 pieces which are bundled as five
boxes in a shrink wrap. Further, a carton of 200 card boxes is packed for bulk
distribution. In this way, a standard carton contains 2,000 pieces of ballpoint pens.

PAGE 12 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014


Table XXII Promotional activities being exercised in the writing instruments industry of
Pakistan
Companies ATL BTL

Sayyed Engineers Children magazines POS displays


Outdoor advertising Stalls
Shop hoardings Exhibitions
Buntings
Dollar Industries Children magazines POS displays
Educational Stalls
magazines
Outdoor advertising Exhibitions
Shop hoardings
Buntings
Television (very rarely)
Shahsons Children magazines POS displays
Outdoor advertising Stalls
Shop hoardings Exhibitions
Buntings
Indus Pencils Children magazines POS Displays
Outdoor advertising Stalls
Shop hoardings Exhibitions
Buntings
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Shaheen Ballpoints Shop hoardings POS displays


Buntings Stalls
Exhibitions

 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.

3. Shaheen Group: 1982 to present


The Shaheen Group has a history of almost 40 years in Pakistan. It is a diversified group which
started off its operations in Pakistan by introducing ceramic tiles in 1982. Since then it has
entered into different ventures like sanitary wares, poly propylene (PP) films, baby diapers and
most recently writing instruments. The details of these ventures of the Shaheen Group are
discussed below.

3.1 Shaheen tiles


Being a project of the Shaheen Group of Industries, Shaheen Tiles started in 1982 as a small
setup which produced wall and floor tiles. In 1995, when the market was flooded with imported
wall tiles Shaheen emerged as the only local option for quality floor and wall tiles in Pakistan.
Based on top-of-the-line Italian technology, Shaheen introduced its new range of double
fast-fired wall tiles into the market for those seeking quality and economy at the same time.
In year 2000, Shaheen Tiles had to increase its production capacity by three times to meet
the ever increasing demand. In the same year, Shaheen started in-house production of tiles
raw material (frits and colors) by acquiring the world’s best recipes and plants. These
advanced recipes in frits and colors gave an entirely new look to the product appearance,
quality and finishing. Adding endless possibilities to the imagination of customers, Shaheen

VOL. 4 NO. 4 2014 EMERALD EMERGING MARKETS CASE STUDIES PAGE 13


introduced a range of decorative tiles including strips, trims, motives, panels and mosaics.
To facilitate the customers in better applications and maximizing their benefit, Shaheen
provided its own brand of quality grout and adhesives.
In 2005, Shaheen revolutionized the tile industry of Pakistan by introducing granite tiles
which matched the best quality granite tiles available around the world.

3.2 Shaheen Sanitary Fittings


Another major project of the Shaheen Group is Shaheen Sanitary Fittings, and Shaheen
established itself as the pioneer and market leader in world-class sanitary fittings in Pakistan.
For the first time in Pakistan, it introduced the concept of matching bathroom accessories in a
technical collaboration with companies in England and Germany. Along with sanitary fittings, it
also introduced a wide range of bathroom accessories into the market.

3.3 Shaheen Plastic Pack


Being a sister concern of the Shaheen Group of Industries, Shaheen Plastic Pack produces
cast poly propylene (CPP) films in Pakistan. Shaheen produces these CPP films in different
grades and qualities which mainly include CPP transparent, CPP metalized and CPP
colored films. These films are being used for the purposes of packaging and labeling in
many industries including food and beverages, textiles and automobiles.
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3.4 Baby Shaheen


Another venture of the Shaheen Group is Baby Shaheen which has been producing baby
diapers in Pakistan since 1999. In the last 12 years, Baby Shaheen has emerged as one of
the leading local brands in baby diapers. The Shaheen Group used its existing tiles and
sanitary ware sales force to penetrate into the diapers market in Pakistan.

3.5 Shaheen Ballpoints


Shaheen Ballpoints is the latest of the ventures by the Shaheen Group. The details of the
Shaheen Group’s entry into the writing instruments industry of Pakistan has been discussed
in the above sections.

4. Shaheen Group sustenance choices


Several questions need to be answered regarding the Shaheen Group’s sustenance: How
should it gain its position back in the market? What product line should be offered in the
market? Which packaging scheme should be used to pack its products? Which marketing
channels should be used to distribute its products in the market? Which promotional
techniques should be used to promote its products in the market? And most important of
all - Was this a right business for Shaheen Group? And should it continue the business?

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

PAGE 14 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014


Abstract
Title – Shaheen Ballpoints: a project of the Shaheen Group.
Subject area – Strategic Management, Strategic Marketing Management.
Study level/applicability – Bachelors, Masters.
Case overview – Shaheen Ballpoints is a project of Shaheen Group of Industries who, apart from
manufacturing and marketing writing instruments, are engaged in diversified businesses of sanitary
fittings, sanitary tiles, baby diapers and plastic films. Launched in 2001-2002, Shaheen Ballpoints had
to compete against established ballpoint pen brands in a growing market. Shaheen Ballpoints believed
that by setting out new standards for technology and packaging being used in the writing instruments
industry, they would be able to compete with these giants. Shaheen Ballpoints experienced a mega
launch of its ballpoint pens range in 2002. The wholesale market of Pakistan welcomed Shaheen
Ballpoints quite generously and they paid in advance for their stocks which, generally, was not a norm
of the writing instruments industry of Pakistan. However, soon after its launching, Shaheen Ballpoints
realized some of the technical and marketing issues in its systems and had to pull all its stock back from
the market just after six months of its launch. All the major resellers avoided Shaheen’s stocks which was
a major setback for the Shaheen Group. They re-launched the ballpoints in early 2004.
Expected learning outcomes – It is expected that the students will be able to understand the: issues
associated with using the diversification strategy to grow the business; strategic implications of
challenging the established industry norms and practices; and channel relationships within the industry
and the need to tune-up the channel relationship strategy according to the varied nature of diversified
businesses.
Supplementary materials – Teaching Notes are available for educators only. Please contact your
library to gain login details or email support@emeraldinsight.com to request teaching notes.
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PAGE 18 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 4 2014

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