FOLKLORE AND THE PARKER PEN COMPANY

Once upon a time long, long ago dinosaurs wrote with a thing called the fountain pen, and at that time smoking, especially in public, was fashionable. During that time, so marketing folklore has it, a new managing director took over at Parker Pens. One of his first actions was to assemble the board of directors, stand before them holding the top of the range Parker of the day and ask, “Who is our greatest competitor?”

The first answer to emerge from the board was Shaeffer. Shaeffer produced a pen very similar to the Parker. It had a good reputation for quality, had a similar stylish finish and was similarly priced at the top end of the market.

The new managing director was not, however, impressed with this answer. “We certainly compete to some extent with Shaeffer, but they are by no means our major competitor.” A newer member of the board then suggested that the major competitor might be Biro-Swan, the manufacturers and marketers of a range of ballpoint pens. While these retailed considerably cheaper than the Parker he reasoned that they were used for the same purpose (writing) and hence competed directly with Parker.

The business definition was now changing from ‘quality fountain pens’ to ‘writing implements’ and under this definition pencils could also be considered as competitors, as could the more recent developments in the market of fibre tip pens and rollerball pens.

‘“Your thinking is getting better,” said the MD, “but you’re still not there.”

Another board member then suggested that perhaps the major competitor was the telephone, which had been gaining more widespread use in recent years. Under this view of the market they were in ‘communications’ and competing with other forms of communication including the written word (perhaps competing here with typewriters and more recently word processors) and other (verbal) means of communication.

“More creative thinking”, said the MD, ‘but you still haven’t identified the main competitor.’

Eventually the MD gave his view of the major competitor. To an astonished board he announced, “Our major competitor is the Ronson cigarette lighter!”

When asked to explain his reasoning he defined the market that the company was in as the ‘quality gift market’. Analysis of sales of Parker pens showed that the majority of purchases were made by individuals buying them as gifts for other people. When they considered what to buy, often a major alternative was a quality cigarette lighter and hence the definition of the market (example courtesy of Graham Kenwright).

This example serves to illustrate how asking a basic question such as ‘Who is our major competitor?’ or ‘What market are we in?’ can affect the whole of the strategic direction of the company.

But modern marketing theory takes us even further along the road, for there is another question that may be of even greater significance in determining strategic direction. It is, ‘What business should we be in?’ That, we suggest, should be addressed in the mission statement.

“Where there is no vision, the people perish.”

Solomon (Proverbs 29:18).

MISSION FORMULATION AND STATEMENT

Formulating the mission into a brief and concise statement that can be communicated across the organisation can help engender a sense of common purpose and also provide guidelines for how decisions will be made and resource allocations prioritised in the future.

Poorly constructed statements, however, can cause more damage than good by creating derision among employees, managers and even customers. This reminds me of a credit union in Kingston whose mission was to become the largest financial institution in the Caribbean. Needless to say that it does not even exist today.

FIVE ELEMENTS

Many leading marketing texts no longer speak of separate vision and mission statements. Hooley (1992) suggests that the mission should speak to the company’s objectives and strategy and should incorporate the following intertwining elements:

•The strategic intent or vision of where the organisation wants to be in the foreseeable future.

•The values of the organisation should be spelt out to set the ethical and moral tone to guide operations.

•The distinctive competencies of the organisation should be articulated clearly, stating what differentiates the organisation from others of its kind – what its distinctive essence is.

• Market definition, in terms of major customer targets that the organisation seeks to serve and the functions or needs of those customers that will be served.

• Finally, the mission should spell out where the organisation is, or intends to be positioned in the marketplace, its uniqueness and distinctiveness. This is the result of bringing together market definition and distinctive skills and competencies.

But there is need for caution, for if your business is too narrowly defined that could be ruinous. Ted Levitt (1960) provided many examples of companies adopting a myopic view in defining their businesses. The railroads believed they were in the railway business, not transportation, and failed to take note of alternative means of transport. The oil industry believed they were in the business of producing oil, not in the business of producing and marketing energy.

And then there is Kodak. Remember them?

THE LAST WORD

In defining your business it is necessary to understand the total product or service customers are buying and what benefits it delivers, and avoid the trap of concentrating too much on the physical features offered.

So back to where we started: what business are you in, and what business should you be in? Get a clear vision of the future of your business, for as Solomon warns, “Where there is no vision, the people perish.’ And even the new managing director at the Parker Pen Company may still have had the wrong vision.

Herman Alvaranga FCIM, MBA, is president of the Caribbean School of Sales & Marketing (CSSM), the region’s only CIM Accredited Study Centre. For more insights on sales and marketing please go to his blog at www.cssm.edu.jm.