Richard Cashmans Comment

The printer and copier markets are in mutually exciting turmoil at the moment. Convergence, or the combining of their respective technologies, means that printers and copiers are not only doing each other's jobs, but additionally with the added benefit of combining colour in with standard mono output, fully network able and affordable- all in one a neat unit. That's fantastic for the consumer… isn't it?

You might think the winner in the printer manufacturer/copier manufacturer battle will be about who invents the best product first. But it isn't. It's about the way they are marketed. Currently, the printer market works largely on "giving away" the printer at marginally zero profit to achieve volume placements and then capture the resulting highly profitable and seemingly invisible -thereby expensive-, consumable only after-market, which you are led to believe is as generous as you can get! The traditional copier market is segmented using a value proposition related to speed and volume, with a more expensive one off initial cost but coupled with very cost effective running costs delivered with a high level of service support.

Whereas the traditional copier relies on the glass platen for its source image, the printer relies on the PC and network. Most images are now generated through a PC programme in electronic format and logic dictates that the documents should be produced when needed, fully finished without the need for copying. Now, speed is as directly related to availability (of the unit to produce your job), productivity and convenience, not volume. Being able to print direct from your PC quickly and efficiently becomes a major element in the successful implementation of the benefit to the business. But what about the glass platen? Is it needed? Well yes! The other silently understated network peripheral is the scanner. The internet may have increased the printing part of the equation, but document/information distribution and storage using email, intranets etc. has moved scanning further up the food chain. This has left many of the manufacturers with an emotional change dilemma in being able to see that both market segmentations are now inappropriate and the method to market hopelessly self defeating. The genuine business benefit offered by the new "copier/printer/scanner" technology has created a radically new paradigm, which demands the marketing dynamics to be realigned by visionary marketing, not yesterday's ideas revamped. Remember what happened to the electronic typewriter when first Word Processing and then PC software came along? Despite the best efforts of the blue-ribboned salesmen, trying to bolt in memory chips, the golf-ball typewriter was a dead in the water hazard. practically overnight.

I believe that the same thing will happen to manufacturers, suppliers and marketers who do not move to meet this challenge. I suggest reading "Who moved my cheese" by Spencer Johnson M.D. and "The Oz principle of accountability" by Connors, Smith and Hickman to assist in avoiding the problem.

A similar thing happened more recently, when digital copiers replaced analogue copiers. No amount of artificial market segmentation could keep analogue copying alive. It means nothing to the users.

So, let me share with you where I believe we are now. We are at the beginning of the printer/copier/scanner product marketing battle to own the new multifunctional device industry. Copier technology has a higher cost base- because it has to cater for A3 paper, full finishing and document handling pretty much as standard, and the various models are produced in smaller numbers. They are pretty much up to speed on the controller technologies and have an excellent delivery mechanism to provide cost effective onsite service and support for units using a lot of paper. Printers, however, have a lower cost base (generally A4), knowledge and offerings extending into the domain of the "server", and significantly the brand mindset of the IT department. However their route to market is generally through distribution where they have no demonstrable ability to provide the "comfort and security" of business-critical service and support that purchasers of these units will definitely require. Ironic when printers have been essentially using copier manufacturers' technology for years. (Your laser printer works on much the same principle as a copier).

And as we saw above- traditional copier marketing going forward is a house of cards- misguidedly built on volume, when actually people value availability, especially when you consider that the idea is to reduce the number of units producing their business critical documentation and thereby the associated capital and revenue expenditure. Yet the printer industry has it's own issues to deal with. They operate at the back of the distribution curve where low cost to market and high volume numbers rule the day. This essentially is a "customer care free" zone. They historically have either no service support or low cost low response or back to base outsourced maintenance, and there is no share of the margin of the after market made available to a reseller to gear up to support to the degree offered by the "indirect channel" and required by the customer. This method will probably move to exploit the home and very small office market.

A word about colour. Again it is an inevitable progression and takes quality and value to the next step for the customer. It will be a fundamental requirement, not a market segment, that affordable colour and mono combined will be standard specification in every robust machine and black only offerings will quickly become a thing of the past. Coupled with higher speeds at lower cost, smaller footprints, quieter operation, with all the finishing and scan enabling facilities, these type of units will quickly establish a new and compelling impetus to customers wishing to either make substantial savings across budget headings or huge productivity gains or both.

The opportunities are significant for all involved but we do have to be brave in looking at change to reap the rewards.

Richard Cashman
M.D. Principal Corporation Ltd

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