December 2000
Big bucks in small places
Size doesn't matter. Even small shops can develop lucrative niche markets
Print shops that develop and create niche markets make more money than companies that market themselves as general commercial printers.
While the above statement is a generally accepted fact, most managers seem to believe that specialty markets can only be created when an organization reaches annual revenues of $10 million or $15 million. It is my opinion that, with an informed sales team and committed management, the benefits of niche marketing can be achieved at a much lower revenues level. For new companies entering the extremely competitive printing marketplace, focusing on specific markets is almost essential.

The key to making a success of this business strategy is a commitment to the niche concept by both sales reps and management. Both must realize that, with the proper implementation and mindset, more work will be produced at higher margins.
Let us first determine what constitutes a niche market and the ways in which we can add uniqueness and value to a product so that our customers can differentiate our capabilities from those of our competitors. It is accurate to say that since printing plays an enormous part in the communication cycle, we have a responsibility to make our customers’ work tell the story better, to show the products or services more effectively and, naturally, to do it at a competitive price.

Soft drink labels, such as those used by Coca-Cola, would be considered straightforward printing, and while there are certainly challenges in manufacturing this type of product, it would be considered to be very price-sensitive work. However, some wine and liquor labels, while they perform almost an identical function, clearly require much different production capabilities and expertise. These labels are often printed on a substrate other than regular label stock, have foil stamping, embossing or die-cutting, and are sometimes printed in white ink as well as eight or nine other colours with a one- or two-colour backup on the reverse side. The presses used to produce this work are a combination of litho, flexo and rotogravure with in-line embossing and die-cutting capabilities.

While it would be accurate to say that both manufacturers of these products operate in the niche market of label producers, it is easy to understand why there is greater price pressure on those who print the Coke labels than on those who have the skills and equipment to produce the fancy wine and liquor labels.

Niche creation
Most successful niche markets are created within similar industries, such as printing new car brochures for the automobile industry or printing school books for educational publishers. And while these two examples are well-recognized markets, there are virtually hundreds of other potential niche sectors that do not require a multi-million dollar investment in printing or bindery equipment.

The first step in developing a specialty market is analyzing your current customer list. Your goal is to identify national or large industries for which you currently do business, and then list other, but similar, businesses in your area. For example, if you currently produce work for an oil-and-gas company in Calgary or one of the many high-tech companies in Ottawa or on the East Coast, you immediately have a built-in customer base at your fingertips. The same is true if you currently produce work for a major pharmaceutical company in Montreal or a financial institution in Toronto.
Virtually every geographic area within Canada has one or more clusters of similar businesses that are unique to the region. It is these pockets of companies from a single industry that provide a fabulous opportunity for Canadian printers.

The next step is to examine the work you currently produce and assess why your organization was originally awarded this work in the first place. Does your firm have some specialty equipment, such as a perfecting press or mini folder, or offer some other capabilities, such as secure warehousing and distribution facilities, that can be made available to other customers in either competing or complementary industries?
It is important to remember that when you identify a unique talent or product, you must make certain you are good at it, because this is the story you relate as you build, or create, your niche markets. You must also be able to articulate the advantages and benefits of dealing with you and your organization. It is essential that you and your staff be perceived as a team that produces printed materials faster, better and cheaper than your competitors.

Another instance where niche marketing can be exploited successfully is when your firm is recognized for having a specific process rather than producing unique products. For example, an oversize Smythe sewing machine clearly gives you a unique opportunity to be a major producer of coffee-table books. Another company with which I am familiar has created an interesting, profitable niche for itself by printing only in black ink—nothing else. Its customers know what it does and that it does it effectively. As a result, this firm’s name comes to mind quickly when work of this description needs to be produced.

Making money in the printing industry is not easy. However, some of the hardships can be reduced or eliminated entirely by creatively using the materials you produce to enhance your sales calls.

Sales people must be directed and see the value in this type of marketing approach. We know that companies want to make more money and if the correct planning and implementation of these concepts is followed, printing firms will receive more work with higher margins.
Duncan McGregor was president of the former Arthurs-Jones Inc., a Toronto-based, award-winning commercial printer. He led the $5 million-a-year firm to a five-fold increase in sales. He is now a consultant to the printing industry and can be reached at (416) 487-7666.
New Products
Special Feature