Parker Doing Well In China

[algabatz]

 

Borrowed from:

 

http://online.wsj.com/article/SB10001424052970203707504577008591194801860.html?_nocache=1320225018706

 

By CAMERON MCWHIRTER And LAURIE BURKITT

BEIJING—Fancy pens are writing a new chapter for themselves in China.

 

Smartphones and tablets have made expensive pens passé to business executives in many parts of the world. But Chinese professionals are increasingly snapping them up—including some that cost thousands of dollars—as a display of their new wealth.

 

Enlarge Image

 

http://si.wsj.net/public/resources/images/MK-BQ155_CHINAP_D_20111101175706.jpg[/url]http://si.wsj.net/public/resources/images/MK-BQ155_CHINAP_G_20111101175706.jpgLaurie Burkitt/The Wall Street JournalA shopper in China looks at upscale pens, which are selling briskly there.

 

A design team in China for Parker Pen Co., one of the world's largest producers of writing instruments, has darkened its pens' ink to appeal to writers of Chinese characters and added to the pen's head a special Chinese character that says "Fu," meaning prosperity and good luck. Parker has launched several special edition pens, including a "Golden Dragon" pen costing 39,888 yuan, or about $7,500.

 

Such moves have helped make China the top-selling market for Parker, says Penny McIntyre, head of the office products division of Atlanta-based Newell Rubbermaid Co., which owns Parker. Sales of Parker have surged 30% to 50% within the past three years in many of the nearly 500 department stores in China, where Parker sells its Chinese-inspired collection at special kiosks, she says.

 

Enlarge Image

 

http://si.wsj.net/public/resources/images/MK-BQ160_CHINAP_D_20111101175927.jpghttp://si.wsj.net/public/resources/images/MK-BQ160_CHINAP_G_20111101175927.jpgParker PensParker's Golden Dragon

 

The office products division, which includes Parker, is Newell Rubbermaid's most profitable, and in 2010 accounted for about 40% of operating profit and 30% of sales at Newell Rubbermaid, which had 2010 revenue of $5.76 billion. The company does not release specific sales figures for its individual units, but a company spokesman said fine pen sales in China now contribute "substantially" to sales growth for the company. A restructuring and 500 layoffs announced by Newell Rubbermaid on Friday won't affect the Parker division, in which the company plans further investments, the spokesman said.

 

Parker is one of many companies attempting to gain a second wind in China, where pre-existing images can be recast for a brand new set of consumers. Best Western International Inc. launched in China in 2009 as a three-star hotel instead of maintaining its budget image in the U.S. General Motors Corp. positioned Buick in China as an upper-class brand and it has largely become a status symbol in China, a sharp contrast to its image in the U.S. Similarly, French fashion brands Pierre Cardin and Cerruti also came to China in hopes of reviving their luster.

 

Yu Liang, a 37-year-old personal trade consultant, visited a Parker kiosk in the northern port city of Tianjin recently and spent 3,688 yuan ($573) on his sixth Parker pen. Mr. Yu started buying Parker pens a few years ago. "Some people collect handbags, some people collect jewelry, and I collect pens," Mr. Yu said.

 

The number of affluent citizens earning a household income of more than one million yuan (about $156,000) jumped about 20% last year, and they accounted for 45% of China's luxury buyers, according to consulting firm McKinsey & Co.

 

Pens are selling well because they're an affordable accessory and useful in China's gift-giving business culture, says Shaun Rein, managing director of China Market Research Group and author of "End of Cheap China." Pen sales in China, including non-luxury brands, jumped to 7.8 billion yuan, or $1.2 billion, in 2009, up nearly 17% from a year earlier, according to the most recent data available from market research company Euromonitor International.

 

Parker isn't the only maker of pricey pens building a business in China. Montblanc, owned by Cie.

Financière Richemont SA, has opened up standalone stores to sell pens and other products, and says sales are growing quickly.

 

Parker, and a small brand, Waterman, also owned by Newell Rubbermaid, command about a 25% share of the global market for fine writing implements, according to company estimates provided to analysts in 2010. Montblanc has about a 28% global market share, according to the same report. Montblanc wouldn't comment on its market share.

 

Parker's success in China is essential for the brand's survival. Founded in Janesville, Wisc., in 1888, Parker was the most popular fine-writing pen in the U.S. for generations. U.S. Gen. Douglas MacArthur used a Parker pen when he signed Japan's surrender ending World War II.

 

Newell Rubbermaid bought Parker as part of a package of companies in 2000. The company gradually lost prestige—and profits. Sales slumped in North America and Europe, though those markets still make up about half of the company's sales.

 

So Parker turned to China. Jean-Charles Hita, Newell Rubbermaid's Geneva-based president of fine writing, came to Parker about four years ago from Bulgari, and found lots of work to do to rebuild the pen's reputation as a luxury item.

 

The chance to restore sales, Mr. Hita and others saw, was in China, where an expensive pen remains a status symbol that climbing middle-class consumers can aspire to own.

 

Parker dispatched its design team to the country in 2009. The company also priced the pens to make them aspirational—unlike in North America, where it had cut prices as sales lagged.

 

"They went for volume," Ms. McIntyre said of previous Parker management teams in the U.S. "That's fine, I guess, but you denigrate your brand in the luxury space. We saw what happens if you don't pay attention to a market. It's called North America."

 

Zhao Lin, a 40-year-old trade director at a state-owned enterprise in the northern port city Tianjin recently went to the local department store to buy a 1,518 yuan ($236) Parker Sonnet Ladies' Fountain Pen and a 528 yuan ($82) Sonnet Rose Gold as birthday gifts for a co-worker in the human-resources department.

 

"She's always having people sign papers and she can't just pull out any pen for them to use," Ms. Zhao said.

 

Write to Cameron McWhirter at and Laurie Burkitt at

 

 

[georges zaslavsky]

pretty interesting news, however it is a pity that they closed newhaven and janesville plants. I will never buy a new parker but a vintage one.

[Joane]

Thanks so much for posting that most interesting article! I'd like to get my hands on or, to be more accurate, wrap my pen around some of that new darker ink! I am a Parkerphile. Like georges, I think it's a pity they closed Newhaven and Janesville, but it's good to know that the Parker pen is alive and well.

[richardandtracy]

It will be interesting to see if Parker's sucess in China leads to a change to their product placement in the west. I suspect the reason they started to fail was that they grew complacent, stopped innovation and ignored what their customers were willing to buy.

 

Regards,

 

Richard.

[nxn96]

Thanks, Tony, for posting this. It was also in today's print WSJ, but I hadn't gotten to that part yet when I saw your post.

 

First off, as I've noted in other posts, I give Newell/Rubbermaid a lot of credit for continuing to support and promote the Parker brand. Now that I read how much the writing instrument division contributes to both revenues and operating profits, perhaps this is nothing more than enlightened self-interest on N/R's part; however, still worth appreciation.

 

I thought it interesting how Waterman was described in the article- almost as an afterthought. For some time now, I've had the impression that the N/R folks were comfortable with Waterman as the "flagship" brand and Parker as the "near-flagship". This article seems to imply that N/R very much sees Parker as the global flagship. Actually, a good choice given that Parker- back in the day- was an early leader in promoting themselves as a global brand.

 

One can't help but think that old KP wouldn't be pleased to know this.

[PAKMAN]

So what will this do to the Chinese fake Parker market?

[OcalaFlGuy]

I suspect the reason they started to fail was that they grew complacent, stopped innovation and ignored what their customers were willing to buy.

 

Regards,

 

Richard.

 

Bingerewski!

 

So. Parker sells out it's European and US markets that made it what it once was in favor of "the new kids on the block". Sounds just like the Modern Parker I know and loathe.

 

I think it's a Perfect Marriage. A couple generations of billions of customers who've grown up being perfectly content with cheap garbage pens should feel right at home wallowing around with Parker in their modern mudhole of mediocrity.

 

I would say Good Riddance Parker but I'd be late in doing so. You've long ago left the heart and mind of this Big Fanboy of your earlier work and not only did you not notice that, you couldn't have cared less if you had noticed.

 

Parker. Compared to Buick.

 

Yep. That about nails it in my book.

 

(Thank you though OP for the article! )

 

Bruce in Ocala, FL-insanity is making the same (old stupid business) moves and expecting better outcomes each try

[ANM]

Parkers and Buicks have always been very popular in China. Not sure why Parkers have such a cache with them but their last king loved Buicks and even though that was back in the '30s, Chinese with money prefer the new ones today over any other brand.

[richardandtracy]

So what will this do to the Chinese fake Parker market?

Don't really know. May go either way, but on balance I think it'll be beneficial.

 

There may well be a tendancy to force the legitimate manufacturers to improve quality due to national pride and a desire to get Chinese pens into the luxury brand area.

 

I doubt if it'll do a great deal to the fakers, as they are already producing lots of fakes. There don't seem to be many Duofold fakes yet - which is a surprise as Kaigelu have shown with their 316 that China is quite capable of making a very good Centennial copy.

 

Regards,

 

Richard.

[OcalaFlGuy]

On the other hand, if you happen to really like the modern Parkers...

 

perhaps you'd better buy all of them you can while you can.

 

 

I've read recently of various paradigm changes in product design major industries are making solely to satisfy changes the Chinese customer demands with it being well known those Were Not Changes Western customers would like.

 

Specifically in the auto and motorcycle industries.

 

Buick made numerous changes to it's flagship LaCrosse's trunk, interior and engines sizes specifically to accommodate the Chinese export fully knowing the changes were contrary to already established Western preferences.

 

Western motorcycle journalists who were once treated like royalty by the manufacturers. It was of the utmost importance the bike makers had a direct line to their Western customer base. In the past couple years, western journalists have found themselves a couple steps down the totem pole in the attention they are receiving from the manufacturers. What the Western consumer wants just isn't as important as it once was.

 

So, ya better snap them Duofolds up before all you can get are ones with crappy looking gold plating, plastic crystal snake eyes and Dayglo spraycan Maki.

 

Bruce in Ocala, FL

Edited November 2, 2011 by OcalaFlGuy

[Florida Blue]

I'm very glad to see that Parker is thriving in a global market and that they have found great success in China, which will be very important for them as their economy and middle class continues to grow in the future and probably become their largest market.

 

Those maki-e Duofolds are beautiful. It's a shame you don't see them in America that often.

 

If Eastern tastes are influencing Parker design than I don't seem to mind the design influence. Most of the pens that Parker has put out recently (IM, Urban, Premier) I thought looked great.

 

I seem to like Asian design influence in the products I buy. I do drive a Nissan :roflmho:

 

No Buicks for me.

Edited November 3, 2011 by Florida Blue

[rainier]

So, ya better snap them Duofolds up before all you can get are ones with crappy looking gold plating, plastic crystal snake eyes and Dayglo spraycan Maki.

 

Bruce in Ocala, FL

 

As a chinese I really don't like this kind of statement.

[OcalaFlGuy]

So, ya better snap them Duofolds up before all you can get are ones with crappy looking gold plating, plastic crystal snake eyes and Dayglo spraycan Maki.

 

Bruce in Ocala, FL

 

 

As a chinese I really don't like this kind of statement.

 

Perhaps your displeasure would be more meaningful and effective if directed towards your countrymen who at best flood the world with pens of garish design, poor quality, materials and construction and at worst, the same lesser quality illegal counterfeit copies of well thought of trademarked pens, than towards a satirical comment noting that situation... :hmm1:

 

Bruce in Ocala, FL

[ParkerQuink]

If it allows Parker to survive, I guess that it's good. I do wish that they offered more of their products such as the Jotter fountain pen in the US.

[rainier]

Perhaps your displeasure would be more meaningful and effective if directed towards your countrymen who at best flood the world with pens of garish design, poor quality, materials and construction and at worst, the same lesser quality illegal counterfeit copies of well thought of trademarked pens, than towards a satirical comment noting that situation... :hmm1:

 

Bruce in Ocala, FL

Hehe, you said much more than a satirical comment, and please don't tell me what is more meaningful or effective, I don't take lesson from YOU.

 

Chinese used cheap fountain pens in the past to write articles, practise calligraphy (eastern style that you have absolutely no idea) and solve calculus problems, and they did those well. But they didn't use garbage pens. With more and more Chinese buying Parker made 'quality' pens, part of the earnings will go to the design sector of new Parker products. Of course Parker has to design something more suitable for Asian fountain pen users, after all, Chinese writing system is far different from western's. I don't think Parker will make money by only selling its products in the US or Europe markets.

 

The same thought applies to GM cars, with gasoline price as high as european countries, it is wise for GM to make some design changes, if GM wants to survive there. I don't see anything wrong here. Probably this hurts you because GM and Parker are not doing something by your wish but the world changes.

 

 

You are what you write and I think it is also true for message posting on the internet.

[penrivers]

Well, I hope Newell Rubbermaid whom if I am not wrong owes the rights of the Esterbrook Company makes a revival of these beloved fountain pens. Greetings from México. C'mon I have lots of Parkers too.

Edited November 3, 2011 by penrivers

[welch]

Thanks, Tony, for posting this. It was also in today's print WSJ, but I hadn't gotten to that part yet when I saw your post.

 

First off, as I've noted in other posts, I give Newell/Rubbermaid a lot of credit for continuing to support and promote the Parker brand. Now that I read how much the writing instrument division contributes to both revenues and operating profits, perhaps this is nothing more than enlightened self-interest on N/R's part; however, still worth appreciation.

 

I thought it interesting how Waterman was described in the article- almost as an afterthought. For some time now, I've had the impression that the N/R folks were comfortable with Waterman as the "flagship" brand and Parker as the "near-flagship". This article seems to imply that N/R very much sees Parker as the global flagship. Actually, a good choice given that Parker- back in the day- was an early leader in promoting themselves as a global brand.

 

One can't help but think that old KP wouldn't be pleased to know this.

 

The Newell annual report is on-line. Parker has a section in it, including a panel/picture page that shows a Parker "kiosk", such as the ones mentioned in China. "Waterman" shows up once or twice in a list of products. "We also make X, Y, and Z".

 

If I was Mr. Hita, I'd do the same. Parker is a world-famous brand; Waterman is not. In fact, I would put arrow-clips on Waterman pens, and move them under Parker.

 

Maybe next Parker will discover that Pilot has hit a gusher with "luxury" inks, and remember that Parker owns the great Penman line. Ah, to have Penman Sapphire in bottles, cartridges, and even in the Ingenuity refills!

[pajaro]

I like the idea of the Parker marketing strategy in China. Every culture develops its own traditions, and the numerous Chinese have been put-upon for a long time. As their economy grows stronger, they ought to be able to enjoy pens that cater to their likes. C/C pens have a logic from the manufacturing and maintenance viewpoints. They are a modern evolution. The Dragon looks elegant.

 

I don't care what Parker does going forward. Closing plants in the West broke the Parker tradition. Except for Jotters and Big Reds, I haven't bought a new Parker since maybe 1970. I am still using their 51s, and I am not going to be a new pen groupie. As far as Duofolds, Vacumatics, 75s nouveau, and other renewals of a line, especially in comparable materials to vintage, they would be competing with large numbers of vintage pens already available and more interesting than new stuff. They make C/C pens and other new stuff. If they made piston fillers wouldn't everybody do a doubletake. Probably pan them for breaking with tradition of Vacumatic, Lucky Curve, et al. Why not a Lucky Curve nouveau?

 

In many areas new technology leapfrogs old stuff. So, new stuff serves a good purpose, like C/C, which makes it easier for a writer to replace the filling system quickly. The older tech is fascinating, like Rube Goldberg machines. I use old pens because they are old. I have a lot of great older pens. Writing with and playing with fountain pens gives me a satisfaction because they are old and using a fountain pen is an old practice that connects me with the old. I think this animates many. I don't see a mass market today for new fountain pens here, and Parker sees that market as global. They need the biggest markets to make the kind of money they want. It's business. Dream on, though. Nothing wrong with that.