04-09-2012, 12:57 PM
A Study On Business Potential :A Case Study On Linc Pen
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INTRODUCTION
Since the dawn of civilization man has used pen for expressing his thoughts and eventually declared it to be mightier than the sword. From quills and fountain pens to ball points and gel pens, writing instruments have evolved along with human history. In India this seeks writing instrument never really captured the attention of entrepreneurs until ‘branding’ concepts from the west blew in with globalization. Though termed as a trade driven market, of late Indian market analysts have realized the unexplored potential of the humble pen. In the last few decades writing instrument have graduated from daily life necessities to lifestyle commodities. Flaunting a branded pen has never been as fashionable as it is now. Today, along with international brands, India has few national names emerging as strong contenders in this segment, such as Linc, Luxor, Parker, Reynolds, Rotomac, Cello, etc.
Company Profile
Linc Pen & Plastics Limited was incorporated on October 24,1994 at Calcutta in West Bengal with the main object of manufacturing and dealing in all types of writing instruments and other plastic moulded goods.The company has obtained Certificate of Commencement of Business on 7th November,1994.
Linc Pens & Plastics Limited manufactures and markets writing instruments and stationary products. The company is the sole selling agent of Mitsubishi’s premium range of products in India. Linc also markets pencils and erasers of Bensia Co. Limited.. It is also a distributor for Lamy’s products in India.
The company’s mission is to deliver customer value through convenient, innovative and superior writing and stationery instruments Its vision emphasizes that Linc will strive to emerge as a leader in the Indian writing instruments industry through value for money products and a competitive set of supply for materials in the international markets.
The company is headquartered at Kolkata It has two manufacturing facilities- in Serakarole (West Bengal) and Pilerne (Goa) Its branch offices are spread across Mumbai, Delhi and Goa, supported by a marketing network of 55 superstockists and 2503 distributors The company has 32 channel partners in all states presently.
The manufacturing facilities at Goa and Kolkata are ISO 9001 certified also, the company has engaged M/s Price Waterhouse Coopers for implementation of ERP solutions from SAP in their office.
Linc shares are listed on the Mumbai, Kolkata, Ahemedabad and Jaipur stock exchanges.
Linc has a proven track record of innovations by creating newer price segments leading to market expansion. In early 2000, the company launched a Gel pen at Rs.10 when the prevailing price of gel pens from other brands was over Rs. 15 which helped it to capture large market share in gel pens category.
So, far the company has concentrated in the mass price segment, but the future initiatives in launching products in higher price segments shall be instrumental in increasing the topline as well as bottom line for the company.
To meet the demands of demanding and discerning domestic market, Linc associated itself with Mitsubishi Pencil Co. Ltd., Japan in 1992 in a strategic collaboration for their Uni-ball range. It also joined hands with Bensia, the highly popular manufacturer of non-sharpening pencils targeted at the Indian schools-going population giving ample opportunity for Linc to create a niche among the younger age groups as well.
Industry Profile in India
The Indian stationery industry is built on the manufacture and trade of a wide range of paper products, writing instruments, computer and daily used stationery like staplers, erasers, binders, punch machine, children stationery and other related items rather than greeting cards, calendars or gift wrap. It is further divided into school stationery and office stationery.
Over a period this industry has seen growth in the domestic market and is now is all set to become export oriented market For long period China has said to be ruling the export market in Writing Instruments and as per the source China alone exports around Rs.5000 - 6000 crores worth goods. India had not entered much in the export field till now because its domestic demand was very high, at present India’s current export share is barely Rs 200 crores but now the industry is planning to expand further in its supply and infrastructure thus enabling them entry into the foreign markets
The size of writing industry in India is estimated at about Rs 2300 crores, of which organized players account for about Rs 1800 crores This sector is highly price sensitive and trade push plays a critical role for low price segments, which constitute a substantial size of the market There are presently around 15 large scale, 100 midsize & 900 small scale manufacturing units operating in India Exports worth around US$ l00 million are conducted every year from the country according to current estimates. More than 125 countries serve as the customer base for India Present Production capacity accounts for about 40 million pieces a day.
India will serve to be the best possible option for them as it is the only country whose manufacturing cost is almost same as China. If the Indian industries assure product life this is where the Indian manufacturers and exporters will have an edge over china. But the major hindrance of Indian writing industry to grow still remains i.e. though it is among the Asian leaders for supplying stationery its international competition is threat to its writing instrument industry and may stunt the growth of the market within.
Classification
The paper stationery sector is a very essential sector in the stationery industry, which are further bifurcated into school and office stationery. It is comprises of many products like exercise books, diaries, planners, organizers, hard bound note books, subject note books, drawing books, plastic cover, note books, composition note books, filler papers, scratch pads, memo books, memo sheets, legal pads and spiral note books etc where diaries, organizers and planners are yearly salable items, notepads, exercise book, long book, etc are daily used items.
In gifts too, the focus is on paper-based products like autograph books, slam books, bookmarks and party invites Tissue papers and envelopes also constitute as part of the paper stationery
industry since they have also now become important products in offices and schools. No schools and office can do without envelopes. Also one needs tissue papers to keep one clean in office and schools Even toilet paper roles and other such products contribute to this industry The demand for paper stationery is said to be rising and the market enjoys a growth of 5 to 15%
The stationery sector is a cluster of many sectors out of which the most prominent and important is the writing instruments industry The two most important tools of it are pen and paper Other materials like pencil, rulers, writing pa erasers etc., which are relevant items useful for commercial and office use, also play an important role. Even with the advancement age and rule of technology the writing instrument industry still holds a large share of the market.
School stationery over a period has gained its own importance in the market. It consists of a wide range of stationery used by teachers and student in the schools. It includes popular stationery products like notebooks, erasers, pencils, rulers, sharpeners, writing boards, exam boards, graph books, pencil boxes, geometry boxes, notebook covers, glue sticks, maps, children paper clips and binders, pencil grippers, calculators and many more to add to the list. These are available in different types, shapes, sizes and different price ranges in the market to suit every individual requirement. A child going to the school requires all these stationery for daily use in school. It could also be termed as the child’s necessity as far as school is concern.
Its industry captures a huge consumption in India whose sales seems to be increasing day by day due to the increasing government plans and policies of achieving total literacy in India. Previously their consumption was restricted to urban areas but with the free education, facilities in Rural India their consumption in the rural areas have increased tremendously. Its market today is flooded with manufacturers and suppliers which is extremely fragmented.
Drivers & Major Players of the Industry
New ideas and technological advances in the writing instruments sector should be put into practice to survive in this competitive market Though gradually and slowly the market is recovering from buying these cheap goods and it is turning out to be a brand loyal market than the old conventional market, which used to live on substitute or counterfeit goods Also the government’s goal of reaching towards 100% literacy is bound to increase the demand The Indian market today is still on the path of discovering new niches with ergonomic designed products, promotional marketing items and luxury items but in the coming years it is bound to grow tremendously not only domestically but also in it’s exports
immerging as world leaders in Writing Instruments
One essential indicator being the absence of a national brand or a chain of branded retail stores, as is the norm internationally.Here majority of the Industry’s market hold is by the people manufacturing and supplying notebooks and other paper products which include diaries, school calendars, note pads, long books, graph books etc to the schools and children.
Then the writing instrument industry seconds the market that includes products like different types of pencils, pen, sketch pen, markers etc, plays the second major role in the school stationery sector. Apart from that there are many other big and small companies selling other necessary products like erasers, scales, calculators, pencil boxes, geometry cases, writing board, art materials etc. Though there is no particular brand ruling the market alone, some big Indian companies like Camlin Ltd., Hindustan Pencils Ltd., Sundaram Multi Pap Ltd., Pidilite Industries Ltd., Kangaro Ltd., Navneet Publications (India) Ltd., Jineshwar Writing Instruments (Montex), ADD Corporation Limited (Add Gel), Line Pens & Plastics Manufactures (Linc) etc have made their mark and have a strong hold on the stationery market back at home.