Pencil Manufacturing and Marketing Term Paper

Excerpt from Term Paper :

Pencil Manufacturing and Marketing

Production and Marketing of Pencils

Quality-Based Marketing


Niche Marketing

Profit and Loss

Principle of Profit

Factors of Production

Business Environment

Economic Conditions Affecting the Business

The Equilibrium Point or Market Price

Competition within the Free Market

Benefits and Limitation of Free Market

International Marketing

Import and Export of Pencils

Strategies for Reaching Global Market

Managing Business Ethically and Responsibly

Social Responsibility

Business Ownership



Reasons for Business Ownership

Web-based Business

Management Skills




Customer Satisfaction

Development of the Industry


Cross-Functional Semi-Managed Teams


Competitive market

Manufacturing Process

Techniques to Improve Manufacturing

Computer-Oriented Manufacturing

Flexible Manufacturing

Lean Manufacturing

Operation Management Planning

Facility of Location


Motivation of Employees

Training the Employees

Management Training

Compensating Employees

Objectives of Compensation and Appraisal

Determining Human Resource Needs

Determining Threats to the Industry




This paper discusses the complete process of manufacturing of a product till it reaches the end customer. There are many factors involved in this procedure which are elaborated and discussed with respect to the chosen product "pencil." Not only the manufacturing but also the part played by human resource of a company in the marketing of this product is highlighted.


Pencil is a medium of art that is used as a writing instrument. It is made up of wood and the pencil lead is composed of graphite. Graphite is not easily available in U.S. so it is mostly imported from Sri Lanka and Canada. For making pencils, the graphite is mixed with wax and clay. The yellow color of the pencil basically appears due to a liquid that is made up of castor oil. Lastly, the black ending of the pencils is made from carbon black which is available in Texas. Most pencil casings are made up of materials such as plastic or paper. In order to use the pencil, the casing must be removed to expose the sharp end of the pencil.

Pencils are the most common and useful commodities in our lives. They are one of the greatest technological inventions of all times that are designed to use as a symbol of expression, art and communication. Pencils are the most portable objects that help us to achieve our greatest potential. (Martin, 1999)

Production and Marketing of Pencils

In case of an ordinary pencil, the production and marketing process are designed in a way to achieve maximum profit through minimum costs. Success can only be achieved in the marketing of the pencils when the main focus is on the profits that can be achieved through proper strategies and investment.

Quality-Based Marketing

The industry focuses on the quality of the pencils. It needs to produce high quality of pencils that could attract the customers. If a particular brand of the pencil is substandard and not according to the demand of the customer then it won't be of any use to the customer and he won't be interested in buying it.


For the maximum promotion and popularity of the pencils, the manufacturer must keep in close touch with the retailers and make sure that the pencils are beautifully displayed in the markets and shops to attract maximum customers. The retailer can attract the customers by making special offers like buying two pencils and getting one for free. The customers are attracted towards these special offers and this works for the benefit of the manufacturer.

Niche Marketing

Although pencils are low cost products, the company still needs to work on the making of the product because there must be something special about their product which could force the customer to buy that particular brand of pencil. Giving special offers or selling for free can attract the customer to some extent but more effort is required by the manufacturer to make it impossible for the customers to ignore their product. For this, the manufacturer should focus on the making of the product. He should come with rare and beautiful designs that are eye catchy for the buyers and they could not ignore it. (Dube, 1998)

Profit and Loss

The business and marketing of pencils aims to achieve maximum profit by supplying the product to everyone without any delay or difficulty. Profit can be gained by the high quality production of pencils and providing the best material to those who demand for the product.

During the production process of pencils, it is very important for the manufacturers to make sure that they are not spending a huge amount on the making and designing of pencils because that might become a cause of loss for the company. If the company would spread more on the production and manufacturing process of pencils then it might exceed the total revenue. To save the business from a major loss, it is essential that the cost and expenses of the production of pencils should not be more than the revenue.

Most of the business owners take risk by spending their time and money on the business that may not gain any profit but sometimes taking risks helps them gain maximum profit. It is essential for the business of pencils that the manufacturer should work to keep the right balance between the profit and loss of the business.

Principle of Profit

It is important for the stakeholders of the pencil business, who are mainly affected by the profit or loss of the business, that they should do contract with companies of different companies to remain in the market. By having direct link with other companies, they will be able to know their market strategies and could also out number these companies by copying their style of marketing.

The manufacturers of pencil should also exceed their business to nonprofit organizations like schools, charities and social causes, who believe in working for their owners not for profit. Forming good relationship can also be beneficial for the marketing of pencils. (Vitez, 2009)

Factors of Production

The key factors that can help in the marketing and business of pencils and can help in making wealth include:


Labor or workers

Capital (money, tools, building)



The most important factors for making the pencil business successful are knowledge and entrepreneurship. These are the key factors for making the business profitable.

Business Environment

The five environmental factors that can be critical to the success of the pencil business are the:

Legal Environment

Technological Environment

Competitive Environment

Social Environment

Global Environment

The legal environment can be beneficial for carrying out the business of pencils, if the government makes laws that allow private ownership of business and by minimizing corruption in business. The technological environment refers to all the latest technologies like internet that helps to make the business of pencils more efficient and productive. The people who are part of the management team of the pencil company should make sure that the latest technology is provided to their workers. The most important thing for the success of the pencil business is that they should use the internet for the buying and selling of pencils which is known as E-commerce.

The competitive environment requires the business owners of pencils to offer best quality products through outstanding services and at competitive costs. To fulfill the needs of the customers, it is important for the manufacturers to provide maximum freedom to the workers so that they could respond quickly to the customers' requests.

The business of the pencil company should also extend to the social environments. The Company should make sure to provide their product to people of all age groups and status. To be part of the global environment, the pencil manufacturers should increase free trade among different nations and should become a part of international completion. (William Nickels)

Economic Conditions Affecting the Business

The economic or political system of any country has a major influence on the success of any business system. For the successful running of the pencil business it is important that the country's economy is stable. It is important for the company to focus on the two major aspects of microeconomics and macroeconomics. In case of microeconomics, the manufacturers should focus on the behavior of people and organizations in the market while in case of macroeconomics they should focus on the nation's economy as a whole. The manufacturers should know how to increase the resources and how to create conditions for the better use of those resources. For the economic growth, it is important to follow the incentive to work hard for hours because the more one works the grater profit he gains.

The Equilibrium Point or Market Price

The Equilibrium point or the Market price refers to the price at which both the quantity of the product demanded by the consumer is equal to the quantity supplied to them. It is preferred by the pencil industry to follow the pattern of the market price by supplying what is demanded by the consumer. This would help them to have a long-run market price of the products.

Competition within the Free Market


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