CASE

STUDY 7
Introduction to Marketing
University of Alicante – 2020/21

MONTBLANC
Original source (in Spanish): Ricardo Sellers Rubio

Company info
Compagnie Financière Richemont SA is a Swiss luxury goods company based in Geneva.
Basically, this company has four main business areas: watches, jewelry, writing
instruments and clothing. It also has an 18% share in the capital of the tobacco company
British American Tobacco.
With a high degree of international diversification, the company has a wide portfolio of
brands, among which we can highlight firms such as Cartier (focused on jewelry products,
Swiss watches, leather goods and perfumes); Vacheron Constantin, Jaeger-LeCoultre,
Officine Panerai, IWC, Baume & Mercier or Roger Dubuis (Swiss watches); A. Lange &
Söhne (German watches); Van Cleef & Arpels and Piaget (jewelry, watches, etc.);
Montegrappa (Italian writing instruments); Alfred Dunhill (luxury goods); Chloé
(fashion); and, finally, Montblanc (writing instruments and watches).
Richemont is the third largest luxury group in the world in terms of turnover, surpassed
only by LVMH and Kering. The group closed 2019 (March) with a turnover of EUR 13.989
billion and a profit of EUR 1.943 billion.

Montblanc: the art of writing
One of the group's brands most associated with luxury and with the greatest recognition
in the market is Montblanc. For more than a century, Montblanc writing instruments have
been the symbol of the art of writing. Driven by its passion for craftsmanship and
creativity, Montblanc also offers elegant, sophisticated and innovative creations in the
fields of fine watches, fine leather and jewelry.
The first Montblanc pen was commercialized in 1909 and, so successful was it, that by
1919 the first store dedicated exclusively to the sale of Montblanc products (originally
fountain pens, paper and pencils, another successful device of the time) had opened in
Hamburg. This store was the precursor of the luxury establishments that today are
distributed by the main cities of the world like Berlin, London, Paris or Barcelona.
The launch of its own commercial network was accompanied by innovative advertising
methods inspired by the American trends of the time. The company's marketing
department mounted huge Montblanc pens on the roofs of the cars, and the company's
name was painted on the sides of the planes. Even a photograph of Paris in the 1920s
shows an advertisement covering the entire facade of a building, a rare practice in
interwar Europe. Today this type of communication is difficult to find in the brand, which
is more in favor of using the image of actors such as Hugh Jackman
(https://mistermoda.com/hugh-jackman-en-la-nueva-campana-montblanc/).
In the history of Montblanc, the year 1924 is a turning point in the company's
development. That year the famous Montblanc Meisterstück fountain pen was launched
on the market. Its original design in black noble resin and its three gold rings have
remained almost unchanged until today. The engraving 4810 records the height in metres
of Mont Blanc in the Swiss Alps. Handcrafted, each nib is hand-carved by master craftsmen
from solid gold, requiring 35 steps (before another 70 steps to assemble and test each
completed model).
In 1935 the brand decided to make another foray into the world of luxury: leather
craftsmanship. Thus, Montblanc founded a workshop near Offenbach, a city famous in
those years for its leather craftsmanship, with the intention of creating items such as
cases, notebooks or desk boxes.
After the break of World War II, which left the Offenbach workshop and the Hamburg
factory completely destroyed, the firm was quickly rebuilt and consolidated thanks to the
use of the Meisterstück model by politicians and celebrities. Without a doubt, this was one
of the main weapons with which the company made itself known. From kings to film
directors and government presidents; if you knew everything that has been signed with a
Montblanc, rivers of ink would flow. Literally.
Already in the nineties, and with a consolidated image as an international brand of luxury
goods, the firm tried its luck with watchmaking. Finally, the way the company's first
century was celebrated is very indicative of the approach the firm was taking. In 2006,
Montblanc presented a diamond cut in the image of the brand's emblem: a six-pointed

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star in three dimensions. This milestone marked, in fact, the company's entry into the
jewelry market.

Montblanc Spain
In Spain, the Montblanc brand is led by Celia González Cruza (Bilbao, 1977), who took up
her position as General Manager in September 2019, but has been working for Montblanc
since 2014. Before that she developed her career in the watchmaker Baume & Mercier,
also from the Richemont group. Her objective in the new position is "to further develop
the Spanish subsidiary, although Spain is a country that has been growing and is well
positioned". In addition, Celia points out that "brands have become obsessed with the
client 'Millennial'. Attracting them to luxury brands is not easy".
The brand is well known in Spain for its writing instruments, a division that continues to
represent a large part of its turnover (of which they do not provide figures). "I don't think
writing is something nostalgic, yet. And besides, being at a meeting and taking out a
Montblanc pen or a Bic from your pocket is not the same thing," assures Celia.
The board also points out that "I am the continuity of the previous CEO. After having
launched many new products in recent years to become a brand that accompanies you in
your way of life, now the objective is to reflect on how to work the distribution and brand
image in a more qualitative way. We have done a lot of quantitative work, but coming from
marketing and as a woman, I look more at the form, how the products are displayed and
how Montblanc is explained. We have to work on how to have a better brand image".

Selling luxury
The brand has two stores in our country at street level (Madrid and Barcelona), thirteen
own stores within El Corte Inglés (in addition to the corners inside) and two outlets.
"During 2020 there will be no new openings, right now we are very well represented". It
also sells its products through the official website www.montblanc.com.
The price range of Montblanc products goes from the 250 euros of the cheapest pen to
limited editions of millions of euros. "This does not mean that we want to democratize
luxury, but that someone with an average purchasing power can access Montblanc. The
key is to make every customer feel, regardless of their budget, like someone special. We
sell luxury and that has a value". And especially for the Spanish customer. "We still like
the human relationship, talking to the saleswoman, being shown the product, being made
to feel good... That's why online sales are developing and growing in Spain, but not at the
levels of other countries like England". In spite of that, in our country we will not see any
agreement similar to the one that the French company has with Alibaba in China.
González Cruza recognizes that there was a boom and that all companies became
obsessed with the Millennials. "The average salary of young people in Spain is low and
trying to attract them to luxury brands is not easy. Even so, we have managed to get that
generation to stop thinking 'go, like my grandfather's pen' and look at our smartwatch or
our backpacks. But we do not deny the reminiscences, because that nostalgic aura gives a
value to the brand".

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The smart watch that the CEO of Montblanc Spain talks about is the Summit 2, the first
smartwatch of the Richemont group. "We have to adapt to the times, that's why we have
this model and a launch in the inkwell (not in the watch range) that we will announce
soon. Our motto is pioneering spirit, so it made sense that we would be the first in the
group to enter the world of technology. Innovation and travel are part of society, so how
can we not adapt?
The luxury war between the big groups to get the most brands does not influence
Montblanc, according to the management. "Independent brands have several advantages,
such as the fact that decisions are applied faster because there are not several hierarchies
above them, but in exchange, the virtues of belonging to a large group like Richemont are
synergy and experience: maybe what you want to try with your brand has already been
tried by another one of the group and failed". Can this battle lead to a homogenization of
luxury? González Cruza thinks not: "Each one has its own essence and something brands
flee from is to look like another. What we do is take inspiration from our history, looking
in our archives and going back to the origins of the brand. It's copying us, but ourselves".

Counterfeits: the Achilles' heel of brands
One of the main stones on the road to Montblanc is the issue of counterfeiting. The
counterfeit market in Spain ended in 2018 with more than six million articles seized to
the value of almost one billion euros, according to figures provided by the Ministry for
Home Affairs. Of these one billion Euros, almost 800 correspond to jewelry and watches.
The number of seized items in this sector has increased from 7,145 in 2017 to 411,551 in
2018. "Although the data on interventions and seizures are very good and we are very
satisfied with the results, it is still a bittersweet feeling that Spain continues to import,
distribute and sell this huge number of counterfeit items with the great damage they
generate in the economy, trade and employment. It is clear that if there is a supply, it is
because there is a demand and the consumer must be aware of what is behind the
counterfeits," says José Antonio Moreno, CEO of Andema (association that defends the
company’s trademarks rights in Spain).
Richemont's commitment in the fight against counterfeiting is clear: "We seek to protect
our customers from the network of counterfeit products. Customers can be deceived by
unscrupulous traders, who sell counterfeits as if they were genuine goods". In fact,
Richemont protects its intellectual property assets by working closely with customs, law
enforcement and other authorities, organizing and collaborating in daily raids (online and
offline) to limit the spread of counterfeit products and brands and send a clear message
to counterfeiters. Along these lines, they have set up a website where the sale of
counterfeit products can be reported online:
http://www.richemontbrandprotection.com/

Additional info:
https://www.montblanc.com/en-gb
https://www.richemont.com/
https://www.entrepreneur.com/article/338635

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https://es.wikipedia.org/wiki/Richemont_(empresa)
https://www.expansion.com/directivos/2020/01/29/5e30acf2468aeb6d358b463f.html
https://cincodias.elpais.com/cincodias/2014/09/01/sentidos/1409590845_645933.html
https://www.lainformacion.com/espana/mercado-falsificaciones-mil-millones/6511017/

QUESTIONS:
1. [Total: 0.3 points] Describe the market (sex, age, needs, purchasing power,
lifestyle, etc.) that Richemont is targeting with its Montblanc brand (0.2 points).
What is the company's value proposition? (0.1 points) If necessary, look for
additional information to justify your response.
2. [Total: 0.2 points] The text mentions that one of the main threats the company
faces is the one of counterfeit products. Define the concept of threat from the point
of view of marketing and SWOT analysis (0.1 points). Describe the main differences
between the customer profile that Montblanc targets and the customer profile that
would buy counterfeit products (0,1 points).
3. [Total: 1.2 points] From the point of view of Montblanc's marketing plan, perform
a SWOT analysis using the necessary information (provided in the text or not)
containing at least one threat, an opportunity, a strength and a weakness. Justify
your answers (0.3 points for each SWOT element well answered and justified).
4. [Total: 0.2 points] The text comments that the company has recently launched the
Summit 2 clock, the first smartwatch of the group. With which growth strategy of
those studied in Unit 2 would you relate this launch? Justify your answer (0.2
points).
a. Market penetration
b. Market development
c. Product development
d. Diversification
5. [Total: 0.8 points] Describe the general characteristics of the marketing-mix
strategy that Montblanc is following for each of its elements: product, price,
distribution and communication. If necessary, look for further information (0.2
points for each well-justified element).
6. [Total: 0.3 points] Visit the group's website (www.richemont.com) and download
the latest Corporate Social Responsibility (CSR) report available. What is that
report and what is it for? (0.1 points). Identify and describe two specific actions
that the company is taking in terms of CSR (0.2 points).