RR Donnelley -- Giant Transformation
RR Donnelley combines the magazine segment with catalog/retail in breaking down its sales figures, with $1.585 billion logged in 2002. Reduced ad pages and revenues caused the overall market, both the consumer and business-to-business (B2B) segments, to struggle as a promising start to 2002 wasn't sustained. B2B was hit particularly hard, namely manufacturing and financial titles. A number of publications fell victim to the economy, and perhaps the lone consolation for publishers was the steady depression of paper prices, notes Dan Knotts, president of RR Donnelley's magazine solutions.
"In terms of RR Donnelley, we feel very good about our performance in 2002," Knotts says. "We were able to secure a significant amount of volume in terms of contract renewals, as well as winning new business. We captured market share in 2002, and feel very good about the new structure that we put in place."
In order to add value for its customers, Donnelley has devised a threefold approach, beginning with a service distinctiveness strategy, according to Knotts, which entails augmenting overall service quality for customers (increased training, customer scorecards).
Secondly, RR Donnelley has unveiled new solutions including a digital premedia center that serves B2B clients from the Pontiac, IL, facility. This consolidation of premedia operations allowed the printer to use a standardized workflow management solution. Customers, meanwhile, can utilize the Ad Spring online ad management solution that allows for online soft proofing. A similar consumer publication solution is due to be unveiled this year.
The third area where the magazine group has bolstered its value proposition is distribution efficiency, which is broken into three subsets: a dynamic mail entry program, a co-mailing pool that increases penetration while saving time and money, and a co-palletization program that was slated to be rolled out this spring.
As for 2003, Knotts sees uncertainty on the consumer side due to both the sluggish economy and military action in Iraq. Since business spending drives B2B, he envisions a lengthy recovery period.