Deconstructing the Major Pen Manufacturers II
Introduction
I began this series by using the ad layout of the FPH catalog and inferring from this the strategies of various pen companies as well as how these strategies are playing in the marketplace. Several readers made the valid claim that the pen companies themselves had only a very limited say in the production of the FPH catalog. Let me offer several views about this.
First, the final layout and content are under the control of FPH and not the manufacturers. Nonetheless, the manufacturers seem to have considerable influence over how their products are represented in the catalog. For example, compare the ad copy for the Sheaffer models advertised in the FPH catalog with the copy used on Sheaffer's own website. The correlation is close to one. Likewise, compare the images on the two sites -- same high correlation. In other words, the final product of the FPH catalog represents the outcome of a negotiation between the manufacturer and the retailer.
Ultimately, it is this interaction between the two parties that tells us how each manufacturer's strategy is working out. Clearly, all manufacturers would like to have every one of their models represented and would like catalog pages near the front. FPH, on the other hand, have profit maximizing considerations in mind in determining these things. They need to weigh whatever potential payment the manufacturer is willing to make to them for better position, more page space, etc. with the cost in terms of foregone sales from other products that might have been advertised in that space to greater effect. Thus, the output of the FPH catalog reflects the opportunity cost of filling space with two pages of, say, Sheaffer pens rather than either making the catalog two pages shorter or making the Montblanc section two pages longer. It is when economic costs are on the line that one has a better hope of inferring a strategy, but also inferring how successful it will be.