COMMERCIAL PRINTING OUTLOOK -- Ambiguity is Certain
The profit leaders in PIA's Ratios database typically have a more focused and specific business strategy than lower profit firms, the economist reports. He says they can be broadly categorized as following one of two business strategies:
* Commodity shops serve customers whose choice of printer is driven mostly by cost/price considerations. To be successful, these printers need to be super-efficient and knowledgeable about the entire cost chain.
* Differentiation printers pursue customers who are seeking customized service offerings. This approach requires detailed knowledge of a customer's business (and that of the customer's customers) so the printer can deliver extra services that a client needs most at prices it is willing to pay.
Companies employing either profit strategy also need a market focus or specialization to maximize performance, Davis adds. "There is strong evidence that industry profitability increases with the degree of specialization," he says.
The importance of having in-depth knowledge of print customers also was raised during the "Growth Opportunities for Print" general session at the recent Graph Expo and Converting Expo 02 in Chicago. As part of his presentation, Dr. Joe Webb, president of Strategies for Management in Harrisville, RI, advised printers to know why clients print and why they don't. This effort should also involve learning the overall goals of customers and seeing things from their perspectives, he says.
Cost reduction is key to the success of all printers, Webb asserts. To truly make this a competitive advantage, however, he recommends starting with development of a "right-skilled" staff since everything else—such as technology—can be duplicated by others.
Webb also addressed the blunt question—"Will print survive?" He says the findings from his industry research indicate that:
* Mass market advertisers have few alternatives to print.
* Traditional consumer media are more secure than business-to-business vehicles.
* Direct mail is still a major growth area.