Digital Package Printing – The Value Proposition for the Brand Owner
Fig. 1: Technology adoption lifecycle (Source: Dr. Geoffrey Moore, Crossing the Chasm)
Fig. 2: How brand owners and retailers view the benefits of digital printing (abbreviated table; Source: Karstedt Partners)
Fig. 3: Does interest level change with a premium level of 15 to 20 percent (abbreviated table; Source: Karstedt Partners)
Premiums – What are Brand Owners Willing To Pay?
The same group was asked, “Would you be willing to pay a 15-20 percent price premium for the benefits listed above?” We categorized responses by the respondents’ level of interest:
• “My interest level decreases significantly with a price increase.”
• “My interest decreases somewhat with a price increase.”
• “My interest remains the same with a price increase.”
The results are surprising, and reflect the strength of the Digital value proposition. Only 20 percent of respondents stated their interest in Digital declined significantly if the printed product cost 15-20 percent more. This response reiterates the “value sale” component of Digital Print. Direct retailers express a higher level of price-sensitivity than product manufacturers.
Respondents seem confident that when Digital Printing reaches mainstream production capabilities, they will be able to respond quickly with resources providing cost-saving Digital Print opportunities. Again, there was a positive response to paying a product price premium if it means achieving greater internal savings. Figure 3 shows the impact of a 15-20 percent price premium.
In summary, the major benefits of using a Digital process were seen to be:
• “Speed and quality – It gives us the opportunity to have different package ideas quickly.”
• “Flexibility, inventory management, clarity of marketing message.”
• “Time-to-market and inventory control are very interesting.”
• “Better quality, more customization, personal attention and speed.”
• “Time savings, convenience and quality.”
• “Response time, reduced cost for inventory.”
• “Customization for small quantities for specific customers.”
• “Printing-on-Demand to meet customer’s needs.”
• “Produce customized messages quickly.”
Karstedt Partners consolidates the value discovery section down to the following drivers for the Brand Owner value proposition:
• Drive Brand Awareness – Companies that seek brand awareness through the use of Digital Printing – Market Focus.
• Efficiency Driven – Companies driven to Digital Printing for manufacturing efficiencies – Cost-Reduction Focus.
• Control Driven – Companies look for Digital Printing to provide tighter controls and better integration of their supply chain – Operational Focus.
The next article in this series will focus on these drivers and how digital printing and digital workflows might aid them.