Should Cross Go More Upscale?

[max dog]

I said it before when they first came out and I'll repeat it again - Cross missed a trick when it came to the Star Wars pens and priced them far too high. They won exclusivity on the branding and franchising and they will have it for the next six years (and beyond) as the hype around Star Wars continues and builds and builds. It was any manufacturers dream. If they had pitched those pens at around €100 to €150 a shot, they would have flown off the shelves faster than the Millennium Falcon could jump to light speed. Everyone I know who's a fan of the films ooh'ed and aaah'ed over the pens (and they aren't even fountain pen users) then either yelped or laughed when they saw the price. A golden opportunity to hook in a whole new generation of fountain pen users who might come back and buy some of your other products, lost. 'Upscaling' does not always work and 'upscaling' within a franchise rarely works - people just feel like its a cash in. But I'm sure they must be feeling the squeeze in other ways. Quite a few of Montblanc's latest offerings over the last two or three years have more than an air of Cross design aspects and I guess MB feel they could give the company both a squeeze and a run for its money. I know who will win. It wouldn't surprise me at all if Cross end up scaling down into focusing most of their business into general stationary.

Perhaps Cross realize that too. Have you seen their $22 Starwars Yoda, Darth Vader and R2D2 fountain pens? They are Sheaffers actually, but given Cross owns Sheaffer now technically can say Cross is not finished with marketing the Starwars pens to a broader price range.

 

In that light Cross offers quite a broad spectrum in price range from $45 Beverly right up to a $10,000 solid gold Classic Century fountain pen, offering a model in almost every price range in between. While they go upscale, they don't seem to be abandoning the lower range. Hope Cross has the fortitude to offer such a wide spectrum and remain profitable. Their higher end pens are probably having more traction in Asia I suspect while their low to mid tier pens continue to hold the fort in the west. Time will tell how Cross does.

 

Keep in mind there was a time when Cross were considered more prestigious than Montblanc pre 90's. It were Cross conical tops that adorned the shirt pockets of many executives, more than the white star. While Montblanc went exclusively upscale in the 1990s(wisely) abandoning the lower end completely (Montblanc use to sell pens in office depot too), Cross miscalculated and continued to compete in the lower and mid tier, as did Parker and Sheaffer, and suffered the consequences and Monblanc reaped the benefits of a better strategy and thrived. I think the new executives in Rhode Island see that mistake now and are making necessary adjustments to their strategy. So I wouldn't count Cross out so quickly. IMHO of course.

 

BTW, Cross even offer a bluetooth feature on the Peerless that can be used with your smartphone to track where the pen is so you never lose it. Can't blame Cross for not being innovative.

Edited October 7, 2017 by max dog

[max dog]

As an Asian, I can testify to the fact that Cross do had some decent marketing here and trying ( if not that all successful ) to up market their product and their brand. That stated, Cross is not a new name here either and everyone sees it as a good if not exactly premium pen brand. The common notion is that Cross made great pens in their classic line but are not really that great up or down market. It would be hard for the market to accept paying 50% more all the way to almost double the price for a say 14K gold nib pen of like peers. which is what cross asking for in the market, this is pretty much the same for almost all the western brand. Waterman, Parker, etc and I am not talking about the top end price bracket, just the next step up market pen like the Platinum Century 3776, Pilot 74, or even Hero 100

 

The Asian market had one very fact that differs itself from the others, namely the market had its rather wide spectrum of pen mfr(s) itself and they do produce decent pens. So anything other than the top end premium luxury model, any pens from any European, or US Mfrs are facing competition that demand not just a name, but also of true writing performance and not hobby writing either. On that regard, the Cross and for the matter any mid range European or US pens are no better or worse than Japanese , Indian or Chinese and they are consistently priced at an disadvantage. Last time I check a Cross Botanica with just the steel nib would cost me more than buying a Platinum 3776 Century with a 14K nib, and the Platinum had more nib grind options too. I suppose the only selling point then is the aesthetics.

 

Going up market seems the obvious answer but how much space is left there ... I had to question that .. and what kind of offering can Cross ( or for that other brands too ) offers. When even past great names in this top end sector like St. Dupont, or Cartier are having their pens shuttered in sales; one have to wonder .. the point is up marketing is a strategy but how up market one want to go up market is something to ponder and while up marketing , how the mfr able to foster the name in their mid / non mass consumer mid range market would be a long term commitment that the brand need to made a judgement on.

Thanks for your insight, and a lot of good points. Cross has a lot of hard work cut out for them if they want to succeed in Asia, and can't sit on their laurels.

[max dog]

Cross should get their act together before they try going anywhere else. Upscale hasn't worked out too well for a lot of pen makers. Conway Stewart made some great pens a decade or so ago, and decided to go upscale aiming for the limited edition market. How'd that work out?

I agree. Cross needs to make pens that more people want if they want to succeed, especially if their survival depends on going upscale. The Cross Peerless 125 seems to be a small step in the right direction in the higher tier range, but they need to do more.

 

I'm not sure low to mid-tier market is a place Cross, Parker, Sheaffer and Waterman can continue to compete in and survive without a revenue stream from the higher end of the market, when the competition make Ahabs, ECOs, and 3776s. Century IIs, Preludes, Urbans and Sonnets cost more to produce and just can't compete with what the lower end market can continue to crank out.

 

BTW, Keep in mind Cross is a much bigger ship than Conway Stewart or Omas ever was so Cross may be more resilient and better able to weather out fluctuations in the market as they continue to execute on their strategy.

Edited October 7, 2017 by max dog

[max dog]

Lamy do both markets well and a lot inbetween.

Indeed they do, and their pens (Safari and 2000) are awesome which helps.

I think Lamy has the advantage (as does MB, Faber Castell, Pelikan etc), like the Japanese brands, of having a country of origin, ie Germany, where fountain pen and writing culture in general, is still strong and well (correct me if I am wrong), so their home market gives them a strong foundation.

[max dog]

Going upscale is probably the only viable strategy for the fountain pen game. You don't need to sell as many pens to break even when you sell them for $300 instead of $30....and the incremental cost to make a $300 pen is small.

 

Parker figured that out back in the 1960's with the Parker 75.

Agree. I think for Cross, including Parker, Waterman and Sheaffer (which is owned by Cross) going upscale is their only viable strategy if they want to make a come back. Their dabbling in the lower end of the market for the past few decades certainly hasn't produced any good results. Leave the lower end to the lower end brands that can produce the $30 pens en masse and make a decent profit. If that strategy hasn't worked thus far, why continue down that path and expect results to be any different.

Edited October 7, 2017 by max dog

[ian1964]

It is their marketing that is all wrong. Successful companies create a fan base and feed into it to create and maintain momentum. Just look at this forum for examples outside the big players. MrPen and their Italix range, the Chinese subforum is buzz of excitement for pens costing $5.

It can be done but they need a fanbase to cheer them forward

[max dog]

It is their marketing that is all wrong. Successful companies create a fan base and feed into it to create and maintain momentum. Just look at this forum for examples outside the big players. MrPen and their Italix range, the Chinese subforum is buzz of excitement for pens costing $5.

It can be done but they need a fanbase to cheer them forward

Back in 2008 when I joined the FPN, the Cross forum was a buzz with threads every week by members expressing a favourite Cross and lively discussions about anything Cross. At the end of 2008 Cross moved manufacture to China 100%. By 2009 Cross forum activity dwindled to the state today. So sad. What do you think will happen if Lamy or Montblanc moved manufacture to China? That is why I say, Cross needs to move upscale, move manufacture back to Rhode Island where their offices still exists fortunately.. The previous CEO, came from RayBan, ran Cross like a fashion sunglass company and seriously tarnished the brand image. The new CEO seems to have promising vision for the company.

Edited October 8, 2017 by max dog

[pjford]

Before we developed the Italix line, we were selling Cross, in fact it was our largest seller. Two things that put such companies into a failing situation, their dependency on a network of retailers, department stores,stationers and jewellers, such retailers demand 40 to 50% margin. Their move to China meant that their tradition of craftsmanship was diluted because we all knew that they were not making the pens any more. Their severe reduction in the offering of nib options, again to placate retailers who do not want to stock all the potential variants. Last but not least the annual ritual of raising prices every January when there is little inflation in the system to warrant it.

[max dog]

In the 1990's Montblanc saw the writing on the wall that writing instruments as a utilitarian tool was on a rapid decline as personal computers and internet started to take over. They needed to redefine what the writing instrument would become. Not something just to write with, but something precious and special to behold. Montblanc understood this in 1990 and went exclusively upscale. Cross, Sheaffer, Parker, Waterman did not, and they have become a mere shadow of their former selves, being forced to sell their factorys and move out of the US due to dwindling revenues. Montblanc in contrast thrived.

 

Here is an interview with the North American CEO of Montblanc Jan-Patrick Schmitz in 2003 where he explains that strategy they took in the 1990s which proved to be successful and save Montblanc.

http://www.cmo.com/interviews/articles/2012/6/13/the-cmocom-interview-montblanc-north-americas-jan-patrick-schmitz.html#gs.KT1FEps

Here are excerpts of that interview:

Then our environment changed radically and a couple of things happened. First of all, distribution changed dramatically. Prior to the ’80s, throughout the world there were pen specialists—mom-and-pop stores, independently owned. They were like record stores. Remember them? In any case, all of a sudden our entire distribution broke away with the advent of the computer. The consumer didn’t need a fine writing instrument anymore as a day-to-day tool the way they used to. There was also a behavioral change. Letters used to be handwritten, too, and all of that changed. Hence, our whole business was under siege, and we had to decide what to do about it. We needed to figure out how we could develop our future. Our slogan at the time was, “The art of writing.”We had a long history with literature, writing, and education, so we began to focus less on the function of our product and much more on the meaning of our product and how it relates to you as a person. Also, in the bigger picture, we began reaching into the arts, reaching into culture.

 

Proof is in the pudding, Upscale!

Edited October 8, 2017 by max dog

[JuInd]

It's very hard for Cross to compete with $15 Pilot Metro (still, someone told me that pen is too expensive for her!), sub $100 such as Pilot 74/91 or Platinum 3776, hence moving up the price a little bit doesn't hurt but a Star Wars fp > $500 in general doesn't attract "normal fans", it should have been around $150 - $350, I've heard people coming to a nice pen shop told the owner (?) that the price was unreasonable.