Colorful Strategy: Crayola Crayon Maker Mixes Fun, Profits
EASTON, Pa. - Binney & Smith Inc.'s boardroom has all the trappings of corporate America: a big table, plush chairs, big windows and artwork.
But the 25-pound stuffed bear at the head chair, the tennis shoes in the corner and the cartoons on the wall suggest something is up other than sales.
"We're focused on fun and profit, and know that the two go together," said Richard Gurin, the president of the company that makes Crayola crayons. In a company like Crayola, one might suspect fun would be automatic, what with coloring books and paints sharing shelf space with marketing studies and sales strategies.
But Gurin says he wants his employees to depend on a simple formula: "If we are not making a lot of money, we won't be having a lot of fun. And if we're not having fun, we're probably just not making enough money."
Since Gurin became president of Binney & Smith in 1984 - shortly before the company was bought by Hallmark Cards Inc. - sales have jumped 92 percent to $240 million at the end of last year from $125 million.
An expanding product line has helped.
"Up until 1983, I think we were selling what we knew how to make," Gurin said. "Now we make what we know how to sell."
Crayola's product line includes markers, pencils and fabric paints. The company also added fluorescent and silver-toned crayons and "retired" eight older colors.
In addition, a line of Crayola Kids clothing was introduced earlier this month in Spiegel Inc.'s fall catalog. The line, which includes vividly colored clothing, accessories, belts, shoes and socks, also will be featured in a chain of Crayola Kids stores, the first of which opens in Chicago next month.
"Different mediums are our bag," Gurin said. "Our best ability is to blend color. It's not limitless."
Crayola's self-imposed limits are art products or anything related to color.
"We have people calling here every day wanting to use `Crayola' on their product," Gurin said.
Many never get beyond the first phone call.
"A cereal company, one of the bigs, came to us and wanted to do a Crayola cereal. Things in the shape of crayons, in the colors of crayons. Little crunchy things like that," Gurin said.
"We could have made a million dollars in year one, but in year three it would be gone. Why? We did the research. Moms say to us, `You are not food.' You don't want kids to put Crayola in their mouths, do you?
"That's why we don't put good smells in the crayons. It's OK to eat them, and it will give you colorful bowel movements, but it won't be tasty or good for you."
Crayola also has passed on opportunities to sell fruit drinks with the names of their new colors.
"If we think it's a short-term rip-off, we won't go into it," said Dennis Malloy, Binney & Smith's director of business development.
Crayola has been riding a wave of publicity in the last year, ever since it announced it would drop the eight older crayon colors in favor of bolder, brighter ones. That boosted sales and interest in factory tours.
The company got another boost when top crayon maker Emerson Moser retired last December and revealed he was color-blind.
Over the years, Crayola has been the subject of some good-humor ribbing as well as more serious criticism.
Framed and posted on the boardroom walls, for example, is an autographed Peanuts cartoon featuring an indecisive Linus trying to select a new color for a piece of artwork. Nearby, a Bloom County cartoon criticizes the company for colors called flesh (changed to "peach" in 1962) and Indian Red.
Drexler also has in his office a Mad magazine takeoff of Crayola's new colors. Instead of "forest green" and "sky blue," Mad suggests colors including "Oil Spill Sludge Black," "Decaying Bridge and Highway System Rust," and Drexler's favorite, "Gorbachev Birthmark Umber."
Not all Crayola has touched has been colored gold. Last fall, it dropped a major promotion with entertainers Milli Vanilli, for a line of mechanical pencils and erasable pens marketed to teenagers.
"The Milli Vanilli flap turned out to be as bad as the product was," Gurin said, referring to the negative publicity surrounding Milli Vanilli after the duo was caught lip-synching and forced to return a Grammy award.
Binney & Smith concentrated on products for the classroom from its start in 1903, when the nickel eight-crayon box first appeared, until just after World War II. Although the company only does 20 percent of its business with schools today, it says it keeps up with the nation's education goals.
"The teaching of art has a real impact on a child's learning capability. We've known it for years," Gurin said.
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