Your website addresses ‘Parents and Students’, ‘Artists and Designers’, ‘Office Professionals’, ‘Hobbyists’ and ‘Pre-school’. Would products catering to school children be the largest contributors to sales for Kokuyo Camlin? How is each of these consumer groups growing? And which is the largest product category?
Our company is very old and has existed since the 1930s. We cater to the age group from the time when we start studying and right through school and college. We have products that are market leaders in the category such as the geometry box, our pencil category, pens and notebooks. We’re also a big player in the office segment. We have a very comprehensive portfolio. We’re also a dominant player in the artist community with our fine arts products, with close to 70 per cent (share). We reach out to a very diverse target consumer. Sometimes people know Camlin as just a school or a college brand, which becomes a little incomplete in definition.
All our products fall under the three major product categories of Office, Artist and School-related stationary.
Largest, obviously, is the school segment which is where our brand personality comes from. We draw our positioning from this segment: ‘Making learning fun’.
In terms of its size and potential, the school segment continues to be the largest for a long time given the size of the consumer base. Fine arts, while initially being a category confined to artists, today is being adopted by regular consumers who are opting for art as a hobby and the category is seeing some growth. Office segment has the most potential for growth, second only to school.
Is there an institutional sales component? How large is it?
About 5 per cent of the schools today have started a new trend of institutional buying and for them the most preferred brand becomes Camlin as we have an old connect with schools. So, we do cater to such institutional needs but that segment is very small in size currently. That said, it is definitely a trend we’re seeing.
Are there categories that Kokuyo Camlin has had to update given the innovations across product segments?
We did a lot of upgradation which helped us in our strategy for pencils. Pencils is a very important and basic category for us. We all started writing using pencils and continued to use them till class 3 or 4. We were a smaller player in pencils with a share of only 6 per cent despite being such an established brand. We saw an opportunity in the mechanical pencil category, which has existed for quite some time. Generally what happens when children move on from class 4 is that they start opting for mechanical pencils which they refer to as ‘pen-pencils’, because they want to feel older. Such pencils, with their fine lead, are used for geometrical and practical drawing, where the consumption is not much but the children prefer the mechanical pencils over the wooden ones at such times. We saw a gap here where we realised that children don’t use this pencil for regular writing due to its fine lead which is prone to breaking while extensive writing. We then created a mechanical pencil that has lead as thick as a wooden pencil. It’s a product that can offer uninterrupted writing. In the last one year, we have tried to promote this product using advertising. The children have since then found it to be a much superior product than a regular wooden pencil. Initially the mechanical pencil category was a small one (close to 50 crores) and now it has almost doubled, largely because we have almost a 48 per cent share in this category now and we are driving this category. We see that we can convert or upgrade children from wooden pencils to mechanical pencils.
We also find a cause connected with this when we go to schools to talk about these pencils. Children in school, as we know, are taught about preserving forests, the environment and such. So our promotion of the mechanical pencils falls in line with what children are taught in school about saving trees. The only hurdle that we see in upgrading from wooden pencils to the mechanical one is the price point of the latter. A wooden pencil today is about Rs 5 and the mechanical one is priced at Rs 30. Although, in the long run children only have to buy the lead which costs Rs 1, which makes it economical over time. But there’s certainly that hesitation in making the first purchase. We’re soon planning to launch an economical model priced at Rs 20.
More than upgradation, this move for us is what has redefined the pencil category and we’re now seeing other players also following suit. But we’re definitely far ahead of them.
In other categories like colours, we’ve realised we don’t have the need to increase penetration but to increase consumption. Art has always been a very neglected field in school as a lot of children are pushed by their parents and teachers to focus on subjects like science and maths. But studies have shown that art always helps in the overall development of the child irrespective of which field the child may pursue in the future. Camlin, through its property called Camel Art Contest, has always tried to promote art for children. We’re supporting the contest by developing TV communication for the same which promotes use of crayons as part of a hobby.
What, if any, would be the new categories you are eyeing?
We’re also looking at new product options which are not there today. They could be something like erasable crayons etc. and we’re working towards developing new products for the future.
How does Kokuyo Camlin compare with competitors (Faber Castell, Pidilite) on share of voice in mass media advertising? Are we right in saying we don’t see as much of Camlin, especially on television?
You’re right. Pidilite, Faber Castell and ITC have been very aggressive in advertising for quite some time and Camlin as a brand for last many years has not really used advertising or other methods of mass communication. That thought is one of the big changes we’ve made in the last one year. Initially, most of our investment would go for the retail efforts but in the last one year we have consciously realised that we have to start investing in brand building. We’ve started using advertising for mechanical products, crayons and the art contest which was never communicated through anything other than BTL earlier.
We’ve also given a lot of importance to digital media which we realised has two advantages: being more targeted as compared to TV and interactivity. So, 30 per cent of our current media spends have been diverted to digital. So where we can have two strong TV ads, we can also have eight very popular, viral ads which are either product-oriented or topical.
In what aspect of your business (other than investment), does Camlin draw from Kokuyo?
Kokuyo, on its own, had not seen a lot of action in the Indian market. We’ve launched Kokuyo’s products in the office stationery category. There are some very innovative products such as a stapler that does not use pins or a folder that adjusts its shape according to the amount of paper one puts in it. Such products are of course from the premium category. We’ve recently launched them through modern trade channels or A-class stationary outlets and we’re getting good response.
Kokuyo Camlin expanded its notebook (Campus) business. What sort of competition do you currently face from more established products (like ITC Classmate?)? What would be the marketing and advertising efforts to push this?
We’ve gone completely national as opposed to being mainly present in the South and West. We’re looking to expand into the North and East. We are relatively new players in the category.
The major challenge we face in the notebook category is from unorganised players which thrive only on trade margins. ITC has invested a lot in the last 10 years in Classmate and they’ve created a brand for themselves. We’re a relatively new player where unlike Classmate, which is a major pillar for ITC, we have our strengths across various other categories.
Having said that, we can’t start playing like an unorganised player and have a trade (only) game. We’re trying to balance it out, get our distribution right and once we get a distribution system that allows us to be present all across India we will definitely look at creating a brand. Until that happens, our focus remains on developing distribution and delivering products that are superior in quality. We will not be investing the mass media much for the notebook category for this stage as notebook buying by children still depends on what the cover page looks like and the ‘feel’ of the paper inside.
We realised we’ve got to be a ‘range’ brand. Generally range brands across categories, define their identity not on the functionality but more on the emotional benefit that the brands evoke in the mind of the consumer. This realisation led us to develop our tagline ‘Learning is fun’.
Your products are available online, through sites like Shopkart. How is the online channel performing currently, and how do you view the potential? Are there any particular categories in focus for online sales?
Unfortunately the revenues from the online channel are very tiny. At the same time we do not want to miss out on being present on the platform. Our target mostly are school children and while they may use smartphones and the like for games and entertainment, they do not make purchases through them. But this scenario might change when people start buying everything online all the time. We’re not alarmed by the sales figures coming in through this channel, when we know it will only grow.
The fine art category is the one where the consumer bracket is small but their ticket size is large. The price in this category ranges from Rs 500 to about Rs 1500. So they buy products worth Rs 2,000 to say, Rs 5,000 in one go. We are experimenting to set up our own website. But initially it will be more for learning. We want to test out the online ecosystem and learn about it before using it across our categories.
Kokuyo Camlin has launched the ‘Experience Camlin’ app which allows one to draw and paint using various Camlin products. Does this signal towards a changed (or evolved) demographic?
Children these days are addicted to gadgets such as iPads, smartphones etc. People started questioning us on whether with such technology, use or consumption of conventional art products would come down. But that hasn’t been the case. What we’ve done instead is tried to use the time that our consumers spend with such gadgets to promote our products. What I mean is there might be children who might not be interested in the actual process of drawing or colouring, but they do like the digital platform. So when those children are provided with an opportunity to draw or paint in a game or an app, they eventually do move on to colouring in real life.
How much and in what respects do workshops and on-ground events such as Camlin Art Contests contribute to brand Kokuyo Camlin?
On-ground activities definitely contribute to the topline because the brand has been built for so many years on the back of such activities. Our focus might shift to digital and advertising in the future but we will not distance ourselves from the BTL activities we have always undertaken. Those are what have built the company over so many years.
Is there a change in buying habits that you observe for products catering to school? Is seasonality still a major factor for notebooks and stationery?
Seasonality still plays a big role in categories such as geometry boxes but purchases for notebooks, pencils, crayons keep happening throughout the year. Exams, summer camps create ‘mini-seasons’ which prompt fresh buys. Earlier, children could have a geometry box which could last for five years. We don’t see that happening now. In fact, in some cases, if a child loses a compass or any other item, instead of replacing just that item, people replace the whole box.
Do you see scope for exclusive stores? Or even stationery-specific large format stores?
Yes, we do. In evolved countries such as Singapore or Japan, you will find very big stationery outlets which we do anticipate will happen in India too. Today the RoI on stationery being distributed through modern trade would not be very high and that is why the amount of space given to the stationery section is not so big. But that trend will change as we see a lot of premium products coming in. In the next five years, we should see a big change in our retail environment.
How is your media spend split – across TV / digital / BTL and the like?
I wouldn’t be able to share numbers but going forward TV would be a priority followed by digital. Another area where we plan to dedicate our funds to would be market research to understand how our products are faring, the evolution of consumers and how we fare across India. These three would be the top focus areas for investment.
You work with RK Swamy BBDO (the last campaign for crayons). Who is the media agency? Who are the other agency partners?
Sometime last year we realised we don’t have a creative agency on retainer (which wasn’t a good strategy). With a multi-agency pitch, RK Swamy BBDO was selected. BPN is our media agency. BC WebWise for Camlin is the digital agency and RK Swamy Digital for the Kokuyo line.
(Published in the issue of Campaign India dated 3 October 2014.)
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