Pilot Pen Corporation of America - Company Profile, Information, Business Description, History, Background Information on Pilot Pen Corporation of America

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Company Perspectives

Pilot Corporation of America prides itself on being a leading manufacturer and marketer of quality writing instruments in the United States.

History of Pilot Pen Corporation of America

Pilot Pen Corporation of America is the U.S. subsidiary of Pilot Corporation, Japan's oldest and largest writing instrument manufacturer. In addition to its headquarters in Trumbull, Connecticut, Pilot Pen maintains an assembly and distribution facility in Jacksonville, Florida, and a distribution operation in Guadalajara, Mexico.

The company's product offerings include a variety of ball point, roller ball, gel, and fountain pens, as well as styli, mechanical pencils, markers, and highlighters. They are sold under such trademarks as VBall, Dr. Grip, Razor Point, Vanishing Point, Precise, EasyTouch, Nel-Gel, G2, and Varsity. Pilot Pen also sells high-end pens under the Namiki name, manufactured in Japan, and ranging in price from $35 for a ball point pen to $8,500 for an Emperor Collection fountain pen. On the other end of the spectrum, Pilot Pen develops new technologies, licensed to other companies, including magnetic drawing panels, which can be written on and erased with an eraser bar; thermal transfer ribbon, used by the garment industry to print clothing labels; and a counting pen that keeps track of checked-off items, used by contractors and others.

Parent Company's Early 20th Century Origins

Pilot Corporation was founded by Ryosuke Namiki. Born in Japan in 1880, Namiki graduated from Tokyo Mercantile Marine and then became a professor there after a stint as a merchant ship's chief engineer. As part of his work he made drawings for ship designs using technical pens. He began making improvements to the instruments, and in 1909 he received a patent on a non-clogging drafting pen. He then turned his attention to developing a durable gold nib point to improve fountain pens. After almost six years of effort, Namiki perfected a process for making pen nibs, with gold and an iridium alloy, that were especially suited to the writing of Japanese characters and script. In 1915, with the financial backing of several friends, he quit his professorship to launch a small Tokyo-area factory to produce the nibs. A year later he expanded beyond nibs and began producing complete fountain pens. In 1918 he took on a partner, Masao Wada, a friend and classmate, and the business was incorporated as the Namiki Manufacturing Company Ltd., capitalized with Y200,000. In keeping with the company's nautical roots, they chose "Pilot" (a helmsman or a licensed seaman who guides ships in and out of harbors or through dangerous waters) as a trade name. The company's logo depicted the letter "p" in the middle of a circular buoy.

In 1925 Namiki Manufacturing introduced lacquer pen bodies. For decades fountain pen bodies had been made from ebonite, a vulcanized sulfur and rubber compound that had replace ebony. While the material was inexpensive and durable, ebonite's glossy black surface eventually faded after exposure to sun and the elements. Namiki Manufacturing added raw lacquer to the ebonite to create a patented laccanite process, which produced a permanent glossy black surface, one resistant to scratching and fading. The company soon used the new surface to create decorations to distinguish its pens from the wares of foreign competitors. Given Japan's 1,000-year tradition of maki-e, a lacquer art form, it was not surprising that the company began hiring lacquer artists to decorate the pens. With an impressive selection of sample pens, Namiki and Wada set off on a worldwide tour to show their pens to enthusiastic buyers. Within the year, Namiki Manufacturing opened branches in Shanghai, Singapore, London, and New York. Merchants who carried the pens included Tiffany's in New York, Asprey in London, and Cartier in Paris. In 1927 legendary English retailer Alfred H. Dunhill, best known for his tobacco pipes, smoking supplies and luxury goods, began to carry Namiki pens at the Paris store he had opened three years earlier. Dunhill soon secured the distribution rights to Namiki maki-e-decorated pens and pencils in several countries under the Dunhill Namiki label, and then in 1930 became the distributor of all Namiki products worldwide except in Japan, China, and the United States.

U.S. Subsidiary Formed: 1972

In 1938 Namiki Manufacturing changed its name to Pilot Pen Co., Ltd. With the advent of World War II, business was disrupted and the Dunhill relationship came to an end. After the war Pilot Pen rebuilt its business, resumed producing decorative lacquer pens, and in 1961 added a mass-market line with the production of ballpoint pens. The company launched a subsidiary in Brazil in 1953 and opened in an office in Europe in 1967 that several years later became The Pilot Pen Europe GmbH. Pilot Pen Corporation of America was established in 1972.

The new American operation acted as a distributor, possessing no manufacturing capabilities. It enjoyed modest growth in its first three years, building annual sales to the $1 million level. Then, in 1975, the parent company hired the national sales manager of rival Bic Pen Co., Ronald Shaw, to become the U.S. national sales manager. He would drive the growth of the stateside subsidiary for the next three decades.

Born Ronald Schurowitz in 1938, Shaw grew up in Miami, Florida, the son of a uniform company driver and salesman. He graduated from the University of Miami, where he majored in radio, television, and film. He worked as a radio announcer and became an aspiring stand-up comedian, and was talented enough to provide the opening act for the likes of Dean Martin, Liberace, Connie Francis, and Dean Martin, working in nightclubs from the Catskills to Miami. Although in his early 20s, Shaw was already married and the rigors of the road, the late hours, and the unsteady work of the entertainment business did not mesh with family life. Thus, in 1961 he began looking for a regular job, answered a newspaper ad from Bic and beat several dozen other applicants for the sales position. The trained entertainer proved well suited to sales, and quickly distinguished himself. In 1969, at the age of 30, Shaw became Bic's national sales manager, the youngest in the industry to hold that post.

When Shaw left Bic for Pilot Pen in 1975, he was joining a company that was little known by U.S. consumers, and he faced the daunting challenge of virtually building a brand from scratch. He recognized that one of the company's products, the extra-fine point Razor Point pen, had potential as a mass market product that could establish the Pilot Pen brand. At the time, the Razor Point was marketed as a technical writing instrument for professionals, such as architects and engineers, but Shaw believed that the judicious use of advertising could successfully pitch the fine-point pen to general consumers who would appreciate its attributes. However, as Shaw explained to Industry Week in a 2002 profile, "Conventional thinking wouldn't have worked. If we had gone to the consumer and simply said that our pen wrote longer or smoother without leaking, we'd be merely parroting the timeworn claims of our competitors. I knew we had to market the product a different way, and humor was the route I took."

First, however, Shaw would have to find the $75,000 he determined he needed to pay for the advertising. He flew to Japan for the first time in order to make a personal appeal to the chairman of the parent company. It proved to be an eye-opening experience for Shaw, who began to learn Japanese customs by repeatedly breaching them. He refused an offer of tea and a chance to sit, insisting that he would like to make his presentation as soon as possible. Once ushered into the chairman's office, Shaw again brushed aside the usual courtesies to begin making his case for a marketing budget. As Shaw wrote later about the experience, the chairman "listened carefully, nodding his head and smiling and looking as if he could not be more pleased. I assumed I was doing great and would definitely close the deal. At the end of my presentation, he stood up, expressed profuse admiration for my intentions, and said, 'Shaw-San, this is a wonderful plan. Now, go back to America and sell enough pens so that you have enough profits to afford to do this advertising!' Needless to say, I felt deflated."

Back in the United States, Shaw gambled, taking out a $75,000 bank loan to back the Razor Point ad campaign. The resulting humorous ads caught the attention of consumers, who at the time were accustomed to serious, uninspired pen ads. One of the first print ads showed a woman on a couch conversing with her psychiatrist. The headline read, "Is It Sick to Love a Pen?" In the copy the psychiatrist tells her that loving a pen is "perfectly normal, as long as it's a Pilot Pen." Shaw also put his background as a performer to good use--and saved money--by appearing in some of the early television spots. The campaign worked, the Razor Point became a hit with general consumers, and after a year Pilot Pen's sales doubled to $2 million dollars. Not insignificantly, Shaw was able to repay the bank loan.

Over the next decade, sales steadily climbed as Pilot Pen continued to pursue a lighthearted approach to its advertising. In the 1980s the company enjoyed a successful relationship with comedian Rodney Dangerfield, the perennially downtrodden man unable to gain respect from the world. The running gag in the two-year radio and print campaign was that people, such as a bank teller, would borrow his Pilot Pen and refuse to give it back. Pilot Pen also found another way to promote its brand: tennis. In 1982 Shaw was asked to sponsor a Challenger Series tennis tournament to be held in New Haven, Connecticut. Called the Pilot Pen Open, the event was backed by the company for ten years. Shaw also spent money on a California tournament, the Pilot Pen Classic.

Shaw Named President: 1986

Pilot Pen sales reached $31 million in 1982, and a year later the company moved into a new headquarters building in Trumbull. Sales continued to increase at a steady clip, totaling $49 million in 1986, the same year that Shaw was promoted from executive vice president--a title he received in 1978--to president of Pilot Pen. By this time well versed in the ways of Japanese business, he was entrusted to run the U.S. subsidiary without a Japanese national on hand to keep watch. Allowed to make his own decisions, he continued to grow the business, and his relationship with the parent company was so solid that in 1992 he became only the sixth American to ever be elected to serve on the board of directors of a Japanese company. A year later he received the additional title of chief executive officer of the U.S. subsidiary.

Pilot Pen added manufacturing capabilities in June 1995 when it opened a $5 million, 90,000-square-foot plant in Jacksonville, Florida, which also included packaging and distribution operations. It was backed by $500,000 in city and state funds, an investment that paid off for the community as Pilot Pen soon added a $4.5 million 50,000-square-foot expansion and bought 7.8 acres of adjacent land to accommodate further growth. Pilot Pen steadily added the domestic production of pens, including the New EasyTouch line. It was also distributing the Namiki line of limited editions pens, introduced to the U.S. market in 1994, four years after their debut in Japan.

By this stage Pilot Pen was generating sales in the $135 million range, ranking as the fourth largest pen manufacturer in America. It continued to build the brand through cost-effective advertising relying on humor. Shaw was also a mainstay, serving as the company pitchman. In 1998 he was featured in a new 30-second television spot that took place on a troubled airplane. A stewardess sent from the cockpit cries that she needs a pilot. Shaw rises from his seat, introduces himself as the CEO of Pilot Pen, and offers her a pen. Pilot Pen was also again promoting its brand through the sponsorship of tennis. In 1996 the company became the title sponsor for New Haven's then Volvo International tennis tournament, notable because it served as a tune-up for the prestigious U.S. Open held in New York, the last of the sport's four annual Grand Slam events, and was televised around the world. The alliance proved mutually beneficial, especially after the tournament became a women's event. In 2002 Pilot Pen extended the sponsorship arrangement through 2008.

Every year under Shaw's leadership, Pilot Pen increased sales, reaching the $200 million level in the 2000s. Along the way, the company introduced a number of new pens to the U.S. retail market, as well as promotional products for advertising purposes and specialized new products designed to be sold through licensing agreements with corporate partners. Products created through this New Business Development initiative included 18-karat gold and platinum jewelry, produced using pen-manufacturing technology; magnetic panels and the chalkless blackboard; thermal transfer ribbon; and the counting pen. New Business Development also created unique use pens that could, for example, apply and remove nail polish or apply silver traces to repair electronic circuit boards. With the rise in use of personal digital assistants (PDAs) and tablet PCs, the company also created special writing instruments for use with handheld and other computer devices. To support Pilot Pen's increasing number of product lines, which included conventional pens such as the VBall Grip rolling ball pen, the ergonomic Dr. Grip pen, and the new "gel" pen brands, the company completed a $10 million expansion to its Jacksonville facility, adding another 120,000 square feet.

Shaw reached retirement age in 2003 and a year later began grooming his successor, Dennis Burleigh, who became executive vice-president in 2004 and chief operating officer in 2005. He was slated to succeed Shaw as president and CEO in May 2007.

Principal Competitors

Société Bic; Faber-Castell AG; Newell Rubbermaid Inc.


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