1) Company’s corporate name
The company’s corporate name is “Crayola LLC”. It wasn’t until January 1, 2007 that the original name of “Binney & Smith” was retired and began using “Crayola LLC” as the new corporate name. Crayola became the new corporate name because it was the company’s well-known brand. Crayola is in use in more than 80 countries and had 99% name recognition in U.S. consumer households.
2) Company’s corporate headquarters
Crayola started out in New York City as a headquarters but then relocated in the early 1900s to Easton, Pennsylvania where it now holds the company’s world headquarters and major manufacturing facilities. To be more specific the location of the headquarters is:
1100 Church Lane
3) Parent company
It wasn’t until 1984 that Hallmark acquired Crayola and became the parent company.
Since Crayola is owned by Hallmark Cards, the subsidiaries listed below are Hallmark’s.
a. Crayola LLC
Founded in 1903 and acquired by Hallmark in 1984.
b. Crown Center Redevelopment Corp.
Founded in 1968.
c. DaySpring Cards, Inc.
Founded in 1971 and acquired by Hallmark Cards in 1999.
d. Hallmark Business Solutions
Established in 2009 and acquired by Hallmark in 1988 (Irresistible Ink) and in 2000 (Halmark Insights).
e. Halls Merchandising, Inc.
Founded in 1913.
f. Litho-Krome Co.
Founded in 1933 and acquired by Hallmark in 1979.
g. Sunrise Greetings
Founded in 1974 and acquired by Hallmark in 1998.
h. William Arthur
Founded in 1949 and acquired by Hallmark in 1997.
5) Mission Statement
Since Crayola belongs to Hallmark it therefore uses the mission statement of Hallmark, which is:
- That our products and services must enrich people’s lives.
- That creativity and quality – in our products, services and all that we do – are essential to our success.
- That innovation in all areas of our business is essential to attaining and sustaining leadership.
- That the people of Hallmark are our company’s most valuable resource.
- That distinguished financial performance is imperative to accomplish our broader purpose.
- That our private ownership must be preserved.
WE VALUE AND ARE COMMITTED TO:
- Excellence in all we do.
- High standards of ethics and integrity.
- Caring and responsible corporate citizenship for Kansas City and for each community in which we operate.
- These beliefs and values guide our business strategies, our corporate behavior, and our relationships with business partners, suppliers, customers, communities and each other.
6) Core competency
The core competency of Crayola is that of being innovative when it comes to children’s entertainment. Crayola uses this factor to centralize the way it works and the way it provides benefits to its consumers. Therefore this is not easy for competitors to imitate and it can be used for a variety of products and markets.
7) Identify major product
It is easy to identify the major product of Crayola due to the reason they changed their name was to reflect their best and most well-known product. That product is the crayon. They began with this product by selling a pack of 8 for only a nickel and now sell many different colors and packages.
8) Identify target market
I would say that there are three different target markets. The first being children between the ages of 2 and 10 years old. This is the number one target market because it is estimated by Crayola that the average U.S. child wears down 730 crayons by the age of 10. Crayola estimates that the average U.S child wears down 730 crayons by age ten. I would say the second most popular target market are the parents of these kids or more specifically the mothers. Since they are the ones who have to buy the products for the children Crayola would be smart to appeal to them. The mess-proof products that Crayola has been coming out with is a good example as the non mess stuff appeals to the parents more than the children. I would also say the Crayola appeals to the target market of teachers. A lot of art classes use Crayola products and teachers use the website to get crafting ideas which cause teachers to order things from the website and such.
10) Discuss the company’s marketing mix in reference to the 4 P’s
Crayola is always creating new products to keep up with the way society is changing. They are always trying to improve their products in order to make them more attractive to consumers so that they keep selling. Starting with only crayons and then progressing to markers and then washable markers to making clothes, toys, water, and mess proof products are examples of how Crayola has drastically changed their products. They have made all this changes but still they have tried to keep all the products in the same line, since Crayola has been a color company, they develop the new products based on the company’s core.
Crayola is very efficient in the way they distribute and sell their products. Their products are seemingly ubiquitous as they are in most grocery stores, pharmacies, gas stations, art stores, theme parks, schools, hospitals, etc.. They have direct and indirect channels of distribution since they sell to final customers but also to retail companies. Their headquarters has not moved. They have also found a way to expand and have different plants in different countries which in the end makes distribution easier.
Crayola does a very good job at pricing their products to go along with their target market. They are affordable but at the same time are not overly low because that would make the quality lower than what it actually is. Crayola has a sense of quality and consumers relate them to having a strong brand, which brings customer loyalty. This allows for rising of prices and still has the same demand. They do compete with others with their prices in post products but that isn’t their main focus. Their main goal is to make products that their competitors can’t replicate and use that to set the price they base on their costs, image, and target market.
Crayola bases most of their promotions on the use of television commercials, children magazines, website advertising, and also in-store advertising. This allows them to have face to face, no face to face, and trade sales promotion with this strong promotional mix. They also get involved publicly by having events and activities which promote their products. They do everything they can to reach their target markets.
Crayola draws on new ideas
1. What are their market demographics and psychographics?
The main market demographics are: children between 2 and 10 years old, both genders, with a medium to high income. They are from all over the world and from different nationalities.
The main market psychographics are: children and parents who live in the city, from the upper and middle class. These parents care about their children and are sensitive to advertising, they want their children to have fun while they learn and also don’t want to have to clean up after them because of messy markers or other toys. These parents like the idea of brand quality and give in to their kids and it helps that Crayola is trusted and has safe and mess proof products.
2. Crayola is in what state of the PLC?
Crayola is in the Maturity state of the PLC because their sales curve is starting to flatten out, the profit was falling but their marketing goals are to maximize the market share and profit. They are working on diversifying the products in order to attract new customers and to try and extend the life cycle.
3. How can we define their move from crayon to toys?
Crayola is trying to grow and reinvent who they are and that meant getting innovative and finding different products to make. By only selling crayons they are limiting their market. With the development of technology children are using less and less art products because most of them are offered on computer software. With moving to toys they were reinventing their brand. This gives children the idea that Crayola isn’t just a crayon but also something more fun and creative.
4. Does this create a whole new stage of development?
Yes of course this does. Crayola is creating a whole different brand image so this leads to a new stage of development. They are now focusing on entertaining children and not just giving them art to use.
5. Why the move from brand Binney&Smith to Crayola?
What better to come with an image change than a change in the name to reflect the most popular product a company is selling and known for worldwide. They want to become fun and innovative and Binney&Smith was not fulfilling that new need.
6. Does Crayola have brand equity?
Yes, they have a very strong image which influences customer behavior. With this good influence on customers the company’s position in the marketplace enhances and attaches to the promise of the brand. People have high expectations of the products Crayola produces and this brand equity leads to loyalty, commitment and customer equity from the customers to Crayola brand.
7. Why do you think Crayola moved from school supplies to toys?
Because by only focusing on one target market they can only earn high amounts of money during the start of school years. By introducing toys and other products into the mix they can sell things all year long.
8. How have their 4 P’s changed?
The products has changed the most out of the four Ps. They have gone from crayons to school supplies and from school supplies to toys and other art products for children as well as parents and educators. The place changed a little bit as well. With only one headquarters at the start they have now opened more and are selling all over the world. The price has also changed to reach their target market but without losing their brand image, which attaches price to high quality. Promotion has also changed, now is more oriented to toys, to parents and educators and it is not only school products promotion.
Strengths: they are a global company which include a wide spectrum of individuals whom use the product; It is a recognized and highly trusted brand name and logo. Children love the products and influence their parents to buy them for them; they have a highly successful distribution system, they have products everywhere such as grocery stores, drug stores, internet sales, hospitals, doctor’s offices, schools, gas stations, airports, theme parks, hotels, and restaurants. Schools all over the U.S. and other countries use Crayola for their art materials.; They provide a website that offers free ideas to craft as well as printable coloring pages. Their website even offers how to get rid of stains as well as convenience for ordering and booking.; They have licensing deals with major children’s characters, including all Disney characters, and Nickelodeon characters, which in turn increases the appeal to children; Crayola uses all non-toxic, child-safe materials that are cost effective and efficient. They use a variety of colors with fun memorable names, which appeal to children and adults. Crayola is environmentally friendly as well. They have scented products for sensory skills. They have easy grip products for motor skills.; The majority of their retail promotion consists of television commercials, magazine ads, and point of purchase displays. Their promotion impacts and targets children primarily and foremost, however, it is a pull strategy to create an influence purchase by the parents.
In addition to its inkTank line, Crayola serves the professional market with its Portfolio Series collection of color pencils, oil pastels, and acrylic paints. Because they are most well known for children’s art products, they have yet to achieve high market share in this division, and most art professionals do not use Crayola products.
Crayola launched an unsuccessful line of children’s’ clothing in the 1980’s, and it was scaled back to include only newborn layette sets. In 2007 they launched a test market campaign for Crayola branded bottled water, which was also unsuccessful, as consumers were hesitant to buy it because they anticipated that the water would actually taste like crayons (which it didn’t).
Also in the late 1980’s sales began to decline due to increased competition and the company began to slip into saturation, they began a campaign to increase demand by urging parents to purchase a “fresh box.”
Crayola’s attempt to build a solar power plant was sidelined in 2008. They intended the power plant be used to help run their manufacturing facility in Pennsylvania, however, they have run into problems finding partners to make it a reality.
Crayola still ranks behind in sales and market share in their marker product line. In 2007, Sanford Sharpie had a 31% market share, with sales (at Wal-Mart) of $56 million, while Crayola had a 22% market share, with sales of $37 million (at Wal-Mart).
In 2009 they introduced two innovative lines of products for babies and toddlers; including products that allow babies to explore colors even before they can use a crayon. The products for toddlers are large enough so that they can grasp them, and even color in the bathtub, which allows for easy clean up, therefore appealing to the primary purchaser, parents.
In July 2009 Crayola launched a school social media campaign on Twitter and Facebook. It is geared towards moms (their core purchaser) and features innovative ways to be creative and save money during back to school shopping.
In the spring of 2009 they created a summer wellness campaign to encourage children to play outside more.
With the advent of computers and web based learning, sales of crayons are projected to decrease as children leave behind hand held art supplies at a younger and younger age. It’s called KGOY-kids growing older younger, and many companies have suffered because of it, most recognizable is Mattel, the maker of Barbie dolls. In the 1990’s the average age of a child in their target market was 10 years old, and in 2000 it dropped to 3 years old. As children reach the age of four and five, old enough to play on the computer, they become less interested in toys and crayons and begin to desire electronics such as cell phones and video games. Crayola is slowly falling victim to the same phenomena, how will they innovate to overcome this?
In the downturned economy, parents and schools are spending less on school supplies. A survey from Deloitte found that 64% of consumers said they would spend less on school purchases. Nationwide, parents plan to spend an average of $548 to send their children back to school; and estimates range from a decline of 7.7%, forecast by the National Retail Federation, to as much as 12% in 2009, according to America’s Research Group.
– Binney & Smith. http://www.binney-smith.com/. Retrieved 2010-01-28
– Crayola. http://www.crayola.com/corporate/index.cfm. Retrieved 2009-06-26.
– Hallmark. http://corporate.hallmark.com/Company/Hallmarks-Beliefs-And-Values
– Electic Blog. http://theeclecticblog.blogspot.com/
– Marketing teacher. http://www.marketingteacher.com/SWOT/crayola_swot.html
– About toys. http://toys.about.com/od/crayola/tp/crayolacrayons.htm
– LIB. http://www.lib.washington.edu/business/tlc/archive/crayola.html