Crayola SWOT – Crayola (Binney & Smith), a subsidiary of Hallmark, Inc.

Corporate History

Crayola Manufacturing is a 120 year old company that makes safe, dependable art supplies for children. Because most consumers have never heard of Binney & Smith, the Crayola maker changed its name in 2007 to reflect its brand name. Crayola has many different lines of products; as well as services, which vary from just crayons and markers. Would you like a lesson on SWOT analysis?

Weaknesses

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).

Opportunities

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.

Threats

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.

References

Anonymous. (Jul 28, 2009). Crayola Launches "Creativitycast" Back-to-School Social Media Campaign on Twitter and Facebook. Business Wire. New York

Baxter, C. (May 7, 2009). Crayola solar project in Forks Twp. stalls: Company says it’s still looking for better partners for field of panels to power its plant. McClatchy – Tribune Business News. Washington.

Crayola LLC. (2000). Official crayola website. Retrieved June 16, 2009

Hajewski, D. (2009). Parents spending less on back to school items. McClatchy Tribune News.

Hallmark Buys Crayola Maker. (August 10, 1984). St. Petersburg Times.

Hoovers. (2009). Crayola, LLC. Retrieved on August 9, 2009 from ProQuest Database.

"Top Marker Brands, 2007." MMR, September 2, 2007, p. 22, from Information Resources Inc. Market Share Reporter 2009. Gale, 2009. Reproduced in Business and Company Resource Center. Farmington Hills, Mich.: Gale Group, June 2002

Perrault and McCarthy. (2004). Chapter 14: Promotion. Basic Marketing: a Global-Managerial Approach. McGraw Hill: New York

Disclaimer:
This case study has been compiled from information freely available from public sources. It is merely intended to be used for educational purposes only.

They produce 3 billion crayons a year, plus craft and character licensed activities. This SWOT analysis is about Crayola. Crayola began as Binney & Smith back in 1885 when Joseph Binney partnered with his son and nephew. Binney and Smith sold their first Crayola crayons in 1903, when a box of eight cost only a nickel. The small business began in New York and moved to Easton, Pennsylvania (where they remain today), producing the dustless chalk. In 1958 the Crayola 64-crayon box, which included 16 new colors and a built-in sharpener, made its debut on the "Captain Kangaroo Show." This Crayola box "became part of the collective history and experiences of generations of Americans, and a symbol of the color and fun of childhood." Crayola estimates that the average U.S. child wears down 730 crayons by age ten. And, in the same spirit, the Smithsonian Institution’s National Museum of American History placed an actual 1958 Crayola 64-crayon box and an assortment of 20th century Crayola advertising in the permanent collection of the Division of Cultural History.

The company’s products are packaged in many languages and are sold worldwide. Safety in art materials was the main focus for Crayola resulting in non-toxic colors. Crayola also has a creative factory and offers services for creative minds to run free and party space availability with all of their branded products. In 1984 Hallmark purchased Crayola and has kept the company on top of their industry with products ranging on a wide scale from markers, pencils, chalk, watercolors to silly putty and even ornaments and die cast collectables.

Strengths

Crayola is a recognized and highly trusted brand name and logo. In fact, 98 out of every 100 Americans recognize it. Children age 2-10, their target market, love Crayola products and have selective demand for it. Children demand the products and then influence their parents to purchase them. The Crayola brand name is synonymous with high quality and high brand loyalty.
They are a global company, with a wide spectrum of individuals who use Crayola products all over the world.
Crayola has built up a highly successful distribution system. Their products are available everywhere, including grocery stores, drug stores, Internet sales, hospitals, doctor’s offices, schools, gas stations, airports, theme parks, hotels and restaurants. They sell retail and also in bulk to organizational buyers at a lower cost. Schools all over the US and in other countries like The UK, Canada, Australia, and Mexico all utilize Crayola art materials.
Crayola’s website is geared for children, parents, and educators. They provide free ideas for crafts and printable coloring pages. The website is used for booking, ordering, promotional information, marketing, and more. Crayola even provides advice on how to remove stains on their official website.
Crayola is well-established due to their innovation (keeping the company out of saturation and decline). Crayola has been in service for many years and knows how to cater to the needs of the consumer. Crayola is constantly building new products and the growth targets many individual needs. Crayola also developed art products that emphasized international diversity by launching Crayola My World multicultural crayons. The company hoped that by using crayons, markers, paints, and modeling compounds that reflected the variety of skin tones, children would build a positive sense of self as well as respect for cultural diversity.
Crayola’s price range is reflective of their core target market, middle and lower upper class Americans; and their products are priced competitively with their major competitor, Rose Art. The consumer feels that the price reflects the quality.
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.
They have licensing deals with major children’s characters, including all Disney characters, and Nickelodeon characters, which increases their appeal to children.
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 most large retail stores, Crayola has their own aisle!