Dickeson--Becoming a Model StudentMay 1999
The current acquisition and merger mania is reminiscent of the late 1960s, when conglomerates pasted together disparate businesses with stock swaps. Most of those marriages failed in the '70s and '80s, when anticipated synergies didn't materialize and cash ran out.
Have we, in printing, learned from that history lesson—or are we doomed to repeat it? Will acquisitor companies slash mid-management personnel at the acquired companies to reduce overhead cost? If not, whence comes synergy? Central sales force? Or centralization for what is a collection of custom service/manufacturing enterprises—addressing a wide gamut of markets, of customer needs—lacking threads of compatibility?
Where there is homogeneity of market, process and product among combined companies, there well may be cost-reducing purchasing, managing, marketing and sales synergies. Where commonality is lacking among combined companies, it is difficult to grasp the effectiveness of the conglomerate model envisioned.
The Pricing Model
Most certainly we must review the "mark-up" model of pricing the conversion service that we provide. It is obsolete. Commercial printing is not a "commodity" manufacturing activity. We're not engaged in wholesaling or retailing books, business forms, inserts, brochures and magazines.
Commercial printing is now a conversion SERVICE, not a manufacturer of proprietary shelf items. The new model must focus on the value-added, customized service being supplied. The old model directed concentration to internal "virtual" costs for price determination. The new model directs pricing consideration to a) the customer-perceived value added, and b) alternative media and competitive price constraints.
Henry Ford stuck with his Model T even in the face of technology and market changes. His Model A came too late to protect his earlier market dominance. The message of history is clear. We're in a time of near revolution in marketing and technology. We must adapt our models. The alternative is unacceptable.
—Roger V. Dickeson
About the Author
Roger Dickeson is a printing productivity consultant based in The Woodlands, TX. He can be reached via fax at (281) 419-8213 or e-mail at email@example.com.