Lunch and Sterling Premium Paper
This places McCoy on the residual part of the demand curve. It’s akin to when brand name drugs lose their patents and become susceptible to generic competition. Most people might opt for the generics, but those who don’t are the most passionate, committed consumers. They’re the consumers with the most willingness to pay, and they can represent a real opportunity for the brand owner to milk that inelastic demand, increasing margins and maximizing profits over time.
Designers who still insist on McCoy are willing to pay more. And in my opinion, they should pay more. Jim Tyrone of NewPage knew all of this, which is why we have Sterling Premium. Jim went to Harvard Business School, and between being taught how to effectively use platitudes and be a great leader, he’s learned a thing or two about strategy. They teach these things at HBS. It’s that whole thing about pattern recognition, predicting what’s going to happen…all that stuff Herb Simon and Anders Ericsson revealed about decision-making in the middle part of last century.
So, SAPPI should do as all good profit optimizing firms do. They should follow the lead of the pharmaceutical companies and extract more from those who are willing to pay more. That’s what smart firms do. And NewPage now owns its own niche, one that currently includes a lot of high-end direct mail, including a lot of ours.
And when someone specs McCoy, I’ll be happy to order it for them. I’ll only increase their price and judge slightly.
And those lemons from our lunch? There were plenty left over for my companions to make lemonade.
A third-generation printer, Dustin LeFebvre delivers his vision for Specialty Print Communications as EVP, Marketing through strategy, planning and new product development. With a rich background ranging from sales and marketing to operations, quality control and procurement, Dustin takes a wide-angle approach to SPC