This Month's Spectrum Summary:

(The following is an excerpt from the September 2004 issue of Spectrum, a proprietary monthly briefing published exclusively for the clients of I.T. Strategies, Inc. © 2004)

New industrial printing markets. Did we hear this right?

Talking with Marco Boer this month we're surprised to hear him turning some of our industry's "conventional wisdom" upside down. He is suggesting a model he feels more people need to explore. He calls the theme "Making compromises: the product design conundrum for new industrial printing markets."

Digital vendors, he feels, tend to believe that they must match the performance of customers' existing technologies. But in reality there is very little digital technology that can do this. That may not matter. A lot of existing users are willing to make tremendous compromises if digital technology brings them something they never had before. They may be willing to accept lower performance and higher running cost as a trade-off against low initial investment and the flexibility only digital can give them. Instead of investing huge sums for a high-end digital press, for a start, it may make more sense for them to invest in low-end EP or inkjet and do variable printing off-line. Rather than make a huge leap into a high volume digital press, users are more likely to accept compromises and incremental innovation.

Time to market and affordability are more critical than performance. We are reminded to not listen to the user who is fixated on performance. Users who have installed high performance digital presses as their first step find it hard to achieve the volume needed, since digital is by nature short run, and a lot of short runs are needed to cover the cost of a digital press. Among the suggested guidelines: - the customer is not always the best source of guidance; - find out what is working for existing users and sell that; - consider whether your targeted user is actually the right type of user; - pitch digital as incremental, as a parallel, not replacement technology; - consider known competitive products; - accept the limitations of your technology as well as the strengths.

But the technology, the product and the market target are only the beginning. There is also distribution. For our suggested, low-end strategy, direct sales probably won't work. Marketing will probably need to be through dealers and/or distributors. Or perhaps even selling over the Internet, using Dell as an example.

In short, one strategy is to target the market "sweet spot." For this, the small scale, off-line route seems more realistic than the ambitious high-end approaches that have failed some vendors in the past even though, yes, there will be a profitable role for some at the high end. There is no absolute right or wrong strategy, and we are reminded that in the end what may be more important is certitude and how the strategy is executed.