February 2005
Think vertical and horizontal
Focus on related market sectors to expand your customer base and profits
Printers that create a niche for themselves in specific markets, tend to be more profitable. So it makes sense to analyze the work in your plants, see what you do well and determine why you have a competitive advantage in a particular market segment.

If you can identify two or three jobs that you produced in any market sector, then your company must have gained some knowledge and expertise that should be of value to other companies in that industry. Customers develop an instant comfort level when they learn that you’re doing work for organizations that they know and respect. An example of this is the financial printing segment where practically all the documents a company needs for an initial public offering are produced by two companies. This type of work requires great accuracy, a substantial knowledge of the filing process and an ability to produce proofs and final documents extremely quickly.

Thinking up
While this type of work is very specific and realistically requires the resources of a large printing organization, I recently heard of a situation that had terrific potential for a smaller printer. The owner of this particular company told me that two of his best accounts were legal firms for which he produced stationery, business cards, memo pads and so on. I asked him if he had contacted all the other major legal firms in Toronto to tell them how his firm’s knowledge, experience and value-added services could benefit them too. We agreed that it was a terrific opportunity to create a niche with organizations that were generally expanding, prestigious, and able to pay their bills

We used this process extensively at Arthurs-Jones. For example, after we produced our first annual report for Imperial Oil, we used our completed sample and our knowledge of the industry to eventually produce reports for Gulf Oil, Sunoco and Texaco. These organizations were vertically aligned but we were also able to create a buzz among horizontally aligned companies such as Trans Canada Pipe Lines, Norcen and Barrick Resources. Our sales force used the same strategy after we produced the Toronto-Dominion Bank annual report. We used our knowledge base to close annual report contracts for the other chartered banks. Vertically marketing your products and expertise is a sound business practice that should expand your revenue and improve your profitability.

Thinking sideways
A horizontal marketing strategy was used at Arthurs-Jones by our “furniture specialist.” While this individual worked on a small printing order for a local manufacturer, he met an up-and-coming furniture designer whose products were featured in the catalogue we had just completed. The designer appreciated the care and skill that we put into our printing, and after he moved to a new position with a larger firm, he insisted that the marketing materials and product information sheets be done by our sales rep and our company.

The furniture industry is not unlike the printing industry, where everyone knows everyone else. In a relatively short period of time, our sales rep knew a great many people in the industry. He became well known for his knowledge of how best to market a wide variety of furniture products, how to effectively use a fifth or sixth colour, or how a matte or gloss varnish could help to market particular items. A large portion of the furniture manufactured in Canada is exported to the United States so it was essential that the marketing materials be of a higher quality than the Americans could produce. This created a wonderful opportunity for our sales rep and even today he continues to work with independent designers, manufacturers, and distributors/wholesalers.

A similar horizontal marketing strategy can be used with the pharmaceutical industry. Often, over-the-counter drug manufacturers will hire independent companies to package their products. These firms are generally responsible for producing the product information sheets included in the package. While pharmaceutical companies must be the most sought-after customers in this country because of the huge amount of marketing materials they require, the printing they need, while not glamorous as it’s generally produced in one colour, represents continuing business that needs to be available for the production run of each product.

The printing industry is a demanding, challenging business. But if we take some time to analyze where our strengths lie and how we can bring superior value-added services to our customers, we can not only make it a slightly less difficult, but certainly more fun and more profitable.
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.
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