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    Distribution one of the major challenges for brand, says von Faber Castell

    Synopsis

    Long before the marketers discovered the power of word-of-mouth marketing and testimonials, writing instruments brand Faber Castell, got a testimonial from one of the greatest artists ever.

    MUMBAI: Long before the marketers discovered the power of word-of-mouth marketing and testimonials, writing instruments brand Faber Castell, got a testimonial from one of the greatest artists ever.

    In 1883, Vincent van Gogh in a letter to his friend and Dutch artist Anthon van Rappard wrote, "I wanted to tell you about a type of pencil I have found, by Faber. They are of ideal thickness; very soft and superior in quality to carpenters' pencils. They produce a capital black and are more agreeable for working in large studies. These pencils are encased in soft wood, coloured dark green on the outside and cost 20 cents apiece."

    From artists like van Gogh to every aspiring artist today, Faber Castell and its products are a must have in their kit. The brand name, claims the company is also the first ever pencil to be branded. When the fourth generation Faber family heir, Baron Lothar von Faber took over the company in 1839, he wanted to differentiate his products from inferior goods made by competitors and therefore marked them with the name of the company "A.W. Faber". Later in the 1900s the brand name became Faber Castell, when the sixth generation heiress of the Faber family married Count Alexander zu Castell-Rudenhausen.

    Its been more than 250 years since the brand was born in 1761 in the village of Stein, Germany and today boasts of production facilities in 10 countries, sales companies in 23 countries and it is sold through agents in more than 120 countries. "We are mid-sized family owned business with Euro 538 million turnover. If you place all the pencils we produce in a year back-to-back, it can go around the globe 8 times," says Count Anton Wolfgang von Faber Castell, chairman and CEO of Faber Castell AG and the eighth generation heir to the company. He is in India to flag off the 250 year celebrations of the brand and proudly states that every third person in the world uses a Faber Castell pencil.

    Playing & Learning range also known as the 'red range' is the largest contributor to the brand's revenues. Red Range is called so because of the colour of the packs, that help easy identification of the products at retail shelf. Other product ranges include the general writing range —comprising pencils, ballpoint pen, eraser and the pencil sharper; marking range made of colorful markers; art and graphic catering to hobby painters and professionals; the premium range comprising sophisticated writing instruments and personal stationery and cosmetic range — where Faber Castell provides wood cased cosmetic pencils to some of the leading cosmetic brands in the world.

    "We have an expertise in the manufacturer of wood case pencils and this helps us product eye pencils, lip pencils and other products for some of the leading cosmetic brands in the country," says von Faber Castell. Though a small part of the business, it contributes 15% to the company's revenues.

    13 years after entry in India, Faber-Castell is growing over 20% YOY and has a 30% market share in the playing and learning category, which is primarily colours and art material. Camlin is the other major brand in this space. "We are growing in the writing and marking segment with healthy market shares in categories like textliners, multimark and stampads," says Anup Rana, MD, Faber Castell India.

    The brand caters to about 90,000 retail outlets across Tier I & Tier II cities in India and is also present at 350 modern trade stores and 30 boutique stores for design. While they are not forthcoming with the India numbers, Rana says 7% of its turnover is invested in marketing, with focus on developing direct consumer contacts and trade promotions. "For the next year we intend to build it up to 10% with larger investment on brand building on mass marketing and digital media," says Rana. The company has factories in Goa, Chennai and Daman and lays a great emphasis on producing environmentally friendly products.

    As a brand, von Faber Castell is clear that the future for the brand lies in developing countries like India, China, Brazil, Turkey. "The potential for the brand certainly lies in developing countries like India and China where the potential for education is high and growing. We want to partner a person through his journey in life, from pencils right upto our premium range of products," he says.

    Distribution says von Faber Castell is one of the major challenges facing the brand. "We have high-end luxury pencils and fountain pens. But just products are not enough and we also need sophisticated sales people to push the products at point of purchase. Because of high-quality of our products customers like our things, but the problem is they don't know where they can get them," he says. High on agenda therefore for the Indian team is to improve instore visibility, develop shop-in-shops and improve penetration of the brand.

    Every country that the Faber Castell operates in is managed by the local management team, who annually set the biggest priority for the individual markets. For the coming year pushing the premium range of products is the priority for Faber Castell and Rana says the brand is already testing the products across cities.

    Making the transition from a pencil to a premium product will take sometime, but that is what Faber Castell has set its eyes on. "We want to be a customers' friend for life and are well-positioned as his partner in the beginning of journey. We just need to make sure he continues using the brand as he grows up," says von Faber Castell.
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