Eximius’12 – Level-Up : Round 1

An Analysis of Expansion Opportunities in the Premium Stationery Segment

Aashish AgarwalPrateek Bhargava

Ramnath SrinivasanRitesh Saurabh

Sahil Dhar Hakim

INDIAN SCHOOL OF BUSINESS

TEAM PAPER-TIGERS

Eximius’12 – Level-Up : Round 1

Premium Stationery India : Key Trends

Growth

• Growing segment @ 20-25%• Untapped markets – potential market gains• Low penetration in the segment at present

Competition

• High competition in India with global brands• Large players exist but industry still fragmented• No presence of regional/local players

Customer

• Growing purchasing power of potential target customers• Increase acceptance of premium segment amongst

customers• Customers climbing up the Maslow’s hierarchy of

motivation to buy• Aesthetic needs and esteem needs gaining priority

Category Awareness Present Customer Acceptance Moderate-High

Eximius’12 – Level-Up : Round 1

Premium Stationery India : Industry Attractiveness

Bargaining Power of Buyers

Bargaining Power of Suppliers

Barriers toEntry

Threat ofSubstitutes

Internal Rivalry

> Low product loyalty> Easy to switch brands> Miniscule percentage of theirspending budget> Buying decision – style, snobvalue, perception of othersabout the brand

> High growth rate> High margins> Medium capital> High promotion costs

> Existing business – direct synergy> Sellers fragmented> ITC a huge player = high bargaining power

> Substitutes available> Low switching costs

> This Segment is small part of the industry> Retaliation from local/regional players> Premium connotation with existing brands> Intl players with strong brands

HIGH

MID

LOW

HIGH

HIGH

Industry Attractiveness : Medium

Eximius’12 – Level-Up : Round 1

Consumer Insights : Demographic Trends

• Rising discretionary expenditure• High probability for premium purchases• Rise in the average household income

India’s middle class constitutes 50 million people at present. Likely to go up to 583 million people by 2025

Households that can afford discretionary spending likely to go up from 8 million at present to 94 million by 2025

Target Market-Rising fastest amongst the world-Huge potential to tap

Rising Discretionary Spending Young customer group growth

Eximius’12 – Level-Up : Round 1

Segment Name Primary Need Characteristics Value Proposition Existing Options Willingness to Pay

Writing Instrument Notebook

Current Paperkraft Target:

Young Executives

Reasonably priced

'office' stationery.

21-30 Years60% Male65% Single

MHI : 30-50k

Differentiation from academic stationery,

affordable price

Paperkraft, BILT Matrix, Nightingale,

Parker < 500 INR < 600 INR

Mid-level Executives Premium Office Stationery

30-40 Years90% Male20% Single

MHI : 50-80k

Announce having 'arrived.'

Differentiate from lower executives. Look

for value.

Moleskine, Lamy 500-1200 INR < 1000 INR

SME Owners/Mid-Top Management

High-End Office Stationery

> 40 Years95% Male5% Single

MHI : > 90k

Exhibit prestige and clear distinction from

the rest. Little/No Price sensitivity.

Mont Blanc, William Penn,

Sheafer > 1500 INR > 1200 INR

Mid-level Female Executive

Premium Office Stationery with a

Feminist focus

30-40 YearsFemale

5% SingleMHI : 40-70k

Announce having 'arrived,' but more

importantly as a 'woman in business.'

Moleskine, Lamy

700-1100 INR <1100 INR

Archiving Foreign Tourists

Collectible Stationery

30-60 Years65% Male

Collect High-quality, long-lasting product as

an object depicting the cultural memory

of a tourist destination.

Local/Artisan grade items ~1000 INR ~1000 INR

Accessible, Actionable Segments

Consumer Insights : Segmentation Analysis

Eximius’12 – Level-Up : Round 1

FrequencyHow often do you buy stationery?

Increase in Price Insensitive, Impulse Buying

Corporate GiftingWhat according to you would be an ideal corporate gift?

15%

25%

45%

15%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Corporate Wear Gift/Meal Vouchers

Premium Stationery

Decoratives

High Preference for Premium Stationery in Corporate

10%15%

50%

25%

0%

10%

20%

30%

40%

50%

60%

Once in 1 mo Once in 4 mo Once in 6 mo When I see something I like

Point of Sale

14%

52%

6%

28%

0%

10%

20%

30%

40%

50%

60%

Multibrand Gift Store

Stationery Retail -Modern

Online Stationery Retail -Tradit.

Premium Stationery – Purchase Motivators

42%

90%

25%38%

13%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Value Pricing Brand Customization Quality Availability

Where do you usually buy your stationery from? What factors do you consider when buying Premium Stationery?

Value Pricing is an important Purchase Criteria

Value-Priced, Premium Stationery & Impulsive Buyers

Consumer Insights : Survey Findingsa

Eximius’12 – Level-Up : Round 1

Company Perspective : Strategy Analysisa

Evaluate Market Leader’s functional

approach and strengths

Resegment the market to create a niche

Re-write industry rules to exploit a unique, industry-wide advantage

Create and pursue a unique advantage

EntireMarket

Niche Market

TraditionalRules

NewRules

BEGIN WITH

SHIFT TO

Emphasize on creating ‘Points of Difference’Deliver on Latent Need to overcome reputed players

Eximius’12 – Level-Up : Round 1

Company Perspective : Strategy Execution

OrganizationEmphasis

BusinessOpportunity

Focus on sustainabilityEnvironmental stewardshipA Legacy of India

Growing SegmentSynergies with PresentAdditional Revenue

Choose aBrand

Classmate Paperkraft

ConsumerInsights

Brand ConsciousValue MindedNew Indian

Mid-LevelExecutive

Mid-LevelExecutive - Female

ArchivingForeign Tourist

> Pricing Flexibility>New TG>No Brand Priors>New Target : Value Sensitive

>Current Target : Price Sensitive>Brand Connotation Established>Different TG>Low Price Expectation

<New Brand>

Product

Promotion

Price

Place

a

Eximius’12 – Level-Up : Round 1

Marketing Mix : The 4Psa

Product

Points of Parity> Premium Gift Box> Smooth Writing> Polished Pen Appointments

Points of Differentiation> Distinct Design> Value Pricing> Made in India tag

Product Line

-> Heritage Series -> Executive Series -> Woman of Today Series

Price Results of Conjoint Analysis using below Products

Brand 1, 5.3

Brand 2, 8.2

Brand 3, 6.7

Brand 4, 7.1

Brand 5, 6.3

44.5

55.5

66.5

77.5

88.5

Brand 1 Brand 2 Brand 3 Brand 4 Brand 5

Brand 1 Brand 2 Brand 3 Brand 4 Brand 5Name Mont Blanc 'New' Lamy Parker PaperkraftPrice 3500 INR 1000 INR 2200 INR 1200 INR 600 INRBody Metallic Metallic Metallic Metallic Non-MetallicWeight Ultra Light Regular Light Regular Regular

Suggested Price Range INR 1000 - 1200

PlaceModern Retail In-Hotel Stores

Online Retail Gift Certificates

Promotion Outlay ~ 20% of Sales

Airport Shops

Promotion

40%

40%

15%

5%

0% 10% 20% 30% 40% 50%

DirectCorporate Selling

Print

In-Store

Television

Eximius’12 – Level-Up : Round 1