Around the late 60's/early 70's, this novelty pencil case hit the shops and proved popular with school kids.
The big, rounded, soft plastic, pencil shaped pencil case had a zip near the top for access and you'd usually just end up tipping the contents out onto your desk, a common sight in class first thing in the morning. You'd also be considered quite cool if you had one, like a lot of fads.
I couldn't find an image of an original from this era on the net, so I knocked out this computer image of one, just as a reminder.
Before that, the normal kind of pencil case was like a big floppy purse, and before that it was the traditional wooden box with sliding lid, a creation which seemed to be on the go since the 18th century! That's probably why the big pencil design looked ultra modern when it first cropped up on the scene.
The late 60's/early 70's was also the era when school kids started putting gonks and rubbery monsters on the top of their pencils!