The old riddle – What came first the chicken or the egg? – has a resonance for many in print, though without the fowl reference. For many commercial printers the question is instead: What came first, the pressure on printers to reduce prices, or printers deciding to preempt that pressure by reducing prices? And like the traditional riddle, this is almost impossible to answer. There is no doubt, however, that in many cases price is set too low. This has been identified as a key problem for as long as surveys have asked printers to identify the biggest challenges they face: undercutting prices by competitors.
The implication is that these competitors (or is it always the same company that competes with everybody?) are being unfair, that this is predatory pricing designed to hook a customer perhaps before applying all manner of surcharges to bring the price level to the point that a profit can be made. If a company consistently suffers from this problem, it should, like the fisherman trying to catch dinner in a pond of crocodiles, move to another pond. Or is the low price plague the result of print management companies (other customers are available) imposing prices that printers really should not accept but invariably do to get work to fill the machines. Online trade printers survive with low prices thanks to high volumes and smart organisation.
In the long term classical economics says that the perfect market will eventually find a balance when supply and demand are in step. Print, however, is a dynamic market where overall volumes are in decline. The real threat is not the predatory printer, but the inexperienced brand or marketing manager who believes that digital is only way to reach and influence an audience. And the printer facing a loss of work because of this decides that the answer must be to cut prices further. It isn’t.
The decision about how to reach customers is no longer a simple question of price levels. It is a question of objectives and value for money. Print has a great argument here. As a promotional and sales channel, the statistics show that print works. But as part of the landscape, not as the only marketing channel, and – like all media – when used correctly. The decision to use print is not really about price, it’s about education.
Lesson in the school of hard knocks
The old riddle – What came first the chicken or the egg? – has a resonance for many in print, though without the fowl reference. For many commercial printers the question is instead: What came first, the pressure on printers to reduce prices, or printers deciding to preempt that pressure by reducing prices? And like the traditional riddle, this is almost impossible to answer. There is no doubt, however, that in many cases price is set too low. This has been identified as a key problem for as long as surveys have asked printers to identify the biggest challenges they face: undercutting prices by competitors.
The implication is that these competitors (or is it always the same company that competes with everybody?) are being unfair, that this is predatory pricing designed to hook a customer perhaps before applying all manner of surcharges to bring the price level to the point that a profit can be made. If a company consistently suffers from this problem, it should, like the fisherman trying to catch dinner in a pond of crocodiles, move to another pond. Or is the low price plague the result of print management companies (other customers are available) imposing prices that printers really should not accept but invariably do to get work to fill the machines. Online trade printers survive with low prices thanks to high volumes and smart organisation.
In the long term classical economics says that the perfect market will eventually find a balance when supply and demand are in step. Print, however, is a dynamic market where overall volumes are in decline. The real threat is not the predatory printer, but the inexperienced brand or marketing manager who believes that digital is only way to reach and influence an audience. And the printer facing a loss of work because of this decides that the answer must be to cut prices further. It isn’t.
The decision about how to reach customers is no longer a simple question of price levels. It is a question of objectives and value for money. Print has a great argument here. As a promotional and sales channel, the statistics show that print works. But as part of the landscape, not as the only marketing channel, and – like all media – when used correctly. The decision to use print is not really about price, it’s about education.
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