B1

From commodity to serviceTransforming a paper brand

into a new category

MSC. THESIS BY NICK POLDERMANS

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Omslag_hoofdverslag_enkelzijdig.indd 1 12/6/10 12:23 PM

MSc. Thesis of Nick PoldermansTU Delft, Faculty of Industrial Design Engineering

Strategic Product Design Master's ProgramChair of the supervisory team: Prof. dr. ir. J.A. Buijs

Supervisory mentor: MSc F. Secomandi

Company:Tan Brand Communication ConsultantsCompany Mentor: Kyle Talbot

Client: Hello Paper

Nick Poldermans, December 2010Student number: 1222821

nickpoldermans@gmail.com

Commercial Printer - A company which business revolves around the professional printing and production of print products (“Drukkerij”). Production may also include: binding, folding and more functions.

Commodity - The term commodity is used for lowly differentiated products. Commodity markets are characterized by increasing homogeneity of products, higher price sensitivity among customers, lower switching costs, and greater industry stability (Reimann, Schilke, et al. 2009). Classic examples can be found in: salt, nails or sand.

Communication Platform - A meeting place designed to facilitate interaction and collaboration among people who share common interests and needs. It can be both physical (e.g. a fair, event) or digital (e.g. website, online videogame); it can even be a combination of both. The communication platform is a tool to support a community.

Community - A social network of individuals who interact, whether in person or through online media, in order to pursue mutual or shared interests or goals.

Holding Company - A type of parent company that exists primarily to exercise control over other firms, often without significant operations of its own. The control is exercised through ownership of a majority of the controlled firm's shares.

Merchant - A merchant is a company which buys in and sells products which were not produced by them, in order to earn profits.

Operating Company - An operating company falls under a holding company. In this report the term will be used when

discussing the operating companies of PaperlinX, yet it should be noted that the operating companies in this context perform the same tasks as a merchant.

Paper - There are several details related to paper, which define the product on a technological level that is relevant to commercial printers. This is discussed in Appendix 1.

Print Buyer - A print buyer is in this report defined as a person or company which orders/buys print products at a commercial printer.

Print Product - In this report a print product can be defined as a product which has been produced by a commercial printer. This can be a magazine, a flyer, packaging and many other applications.

Printing - Printing is one of the main topics throughout this report. The context is always focused on the professional printing performed by commercial printers. There exist many types of printing, of which off-set and digital printing are the two main methods. Due to the complexity of these printing methods they are further explained in Appendix 1.

Services, Products, Solutions - In Appendix 2 an introduction to these three topics can be found to define them theoretically.

Social Media - Primarily internet and mobile-based media that enable people to share and discuss content among each other. Examples are Facebook, twitter, linkedin, myspace, blogs and more. A communication platform can incorporate social media.

Glossary

Preface

Graduating at a consultancy company was one of my main goals during the search for a proper (i.e. the perfect) project. I wanted to experience the atmosphere and the specific way of working, feeling it would be an interesting professional context for my own future. From the project I expected it to require strategic thinking and to challenge me in ways I had not yet experienced during my years at the Industrial Design faculty. I set out to find a matching project and company, which proved to be troublesome in a market suffering under the after shocks of the financial crisis.

When I contacted Tan Brand Communication Consultants I received immediate positive reactions. During my first meeting with Kyle Talbot we discussed my experience and the Strategic Product Design master and what possibilities this would offer within Tan. Tan had a number of active clients with whom we could do a project together. One of them was PaperlinX and their brand Hello Paper.

Hello, a paper brand which wanted to extend into the field of services. My knowledge on paper did not reach much further

than the common stereotypes of it being white and made from trees, and services were still a vague and undefined concept in my educational experience. After the initial exploration of the company and market a world of challenges quickly exposed itself; and a challenge was exactly what I was looking for.

Many thanks go to Kyle Talbot for the opportunity to do this project and his advice during the entire process, Margreet Sloot for her advice and insights from the view of PaperlinX and of course, everyone at the Tan Brand Communication office for their support, participation in the brainstorms, delicious lunches and mainly their fantastic company.

I would like to thank my supervisory team, Jan Buijs and Fernando Secomandi, for the clever remarks and stimulating questions. Keeping a critical eye on the project, which was very valuable when I buried myself in paper.

Last but not least, my friends, family and girlfriend for their understanding, support and contributions to this project.

Enjoy reading this thesis,

Nick Poldermans

Executive Summary

HelloHello Paper is a brand of paper aimed at commercial printers in Europe. Since 2001 they have been the number one in their market, by offering a strong product available in a broad number of specifications, combined with proper marketing. Hello starts to realize their brand is slowly losing its advantage. The competition is catching up, by following in their footsteps. Hello needs to innovate.

Hello is a product of PaperlinX; an international Holding of paper merchants. Within Europe PaperlinX owns merchanting companies in 18 different countries, which they call operating companies. Each of these operating companies is responsible for the sales and distribution of the products and Hello is one of their most important product brands.

Internal Structure Through the commoditization in the market, Innovation within the product paper is not an option. Hello spotted the possibility in moving towards offering services around their products and clients. Hello has pursued this in the past, yet to no avail. An exploration of the paper industry and PaperlinX' structure revealed that Hello innovated based on the technology and resources of the operating companies, which were not directly linked to Hello. These innovations were therefore credited to the Operating Companies. It was concluded that Hello would have to innovate independently from them, in order to succeed.

Throughout its existence Hello has positioned the brand as The Answer to the needs of the commercial printers. As of this moment their actions do not fulfill this vision beyond their marketing message. It was concluded that this vision should be the guideline for service innovation under the Hello brand. Accordingly the commercial printing market became the main focus for the project.

Commercial PrintersBuilding on these insights the project focused on the needs of the commercial printers, and their clients, the print buyers. The communication market, in which commercial printing plays a role, is changing. Online media like websites and social media are increasing in use while printed media is decreasing. Currently the offer is greater than the demand for printing.

Commercial printers can be divided in two types; printers focused on capacity and printers focused on service. Due to the difference in demand and offer the market became focused on price, and printing was considered a commodity. This change lead to the fact that service focused printers started competing on price, which in its essence is the field of capacity focused printers; a lost cause.

Service focused printers are having trouble distinguishing themselves in this market. It was discovered that their approach towards the print buyers was outdated and the main cause of this. A technological mind-set and technology driven innovation does not match with the print buyers. Print buyers are creatives; active in marketing, communication and

graphic design. Commercial printers need to change their approach towards their clients. Three different issues were acknowledged to improve the approach of the commercial printers.

Improve the transparency of the Printing Process, Instigate a pro-active approach towards the print buyers and Create print buyer centered touch points, were the three search fields which were concluded from the analysis. These three search fields were used as the starting point for the generation of new concepts for Hello, aimed at the commercial printer.

Idea GenerationCreative sessions lead to several ideas and five of these ideas were selected. Each of the concepts had market potential, yet it was concluded that the they are too ambitious to implement under the current Hello brand. The concepts would first demand a re-positioning of the Hello brand. This lead to the creation of a complete strategy for Hello, to move the brand towards new product categories.

The StrategyOne of the selected concepts covered the creation of an online Hello Communication Platform, aimed to help the commercial printers strengthen their position. This concept was taken as the starting point to re-position the Hello brand. Building on Hello's the answer, it is named Hello Solutions.

Hello Solutions is an online communication platform through which Hello provides the commercial printer with

information to help them with their business. For this a conceptual design of a communication platform was designed; including the many factors surrounding it.

As the community grows, Hello will re-position itself in the minds of the commercial printers and the brand will become accepted as a provider in categories beyond paper. Through the community Hello will be able to have dialogues with their clients. Hello will leverage this central position in the community to gain insights into the market. These insights will lead to opportunities for new products, services and applications.

Once Hello has gathered enough research, their brand has re-positioned itself and the communication platform has a sufficient amount of members, Hello will be able to use Hello Solutions as a sales platform for new products, services and applications; profitable solutions. In this report three conceptual applications and services are provided, to give Hello an insight in the possibilities this could offer the brand in the near future.

ConclusionWith this strategy Hello will be able to extend its brand into new categories. Due to the troubling predicted future of paper, this will provide the brand with new fields to pursue growth and revenue.

Index

Reading Guide I

Introduction II

Section 1 Ch1. Paper Industry 6 1.1 The Market 2

1.2 Market Structure 3

1.3 Merchanting 4

1.4 Commercial Printers 4

1.5 Print Buyers 5

Ch2. PaperlinX 6 2.1 Structure 6

2.2 Product Brands 7

2.3 Services 9

2.4 Marketing 9

2.5 Sales 9

Ch3. Hello Paper 10 3.1 Brand & Product 10

3.2 Sales 12

3.3 Marketing 13

3.4 Competition 13

Ch4. Focus 15 4.1 Product Innovation 15

4.2 Differentiation in Brands 15

4.3 Diffusion in Structure 16

4.4 Brand Extension 17

4.5 Target Group 18

4.6 Focus 19

4.7 Conclusion 19

Section 2 Ch5. Communication 22 5.1 Broadening of the Market 22

5.2 Dynamic is Convenient 22

5.3 The Role of Print 23

5.4 Conclusion 24

Ch6. Print Market 25 6.1 The Market 25

6.2 Commoditization of Print 26

6.3 Commercial Printers 28

6.4 Print Buyers 30

6.5 Print Job Cycle 31

6.6 The Gap 35

6.7 Search Fields 36

6.8 Conclusion 37

Ch7. Communities 38 7.1 Communication Platform 38

7.2 A Community 39

7.3 Independent or Branded 40

7.4 Online Business Models 41

7.5 Partnership 42

7.6 Conclusion 42

Section 3Ch8. Ideation 46 8.1 Introduction 46

8.2 Method 46

8.3 Concepts 47

8.4 A Strategy 49

8.5 The Concept Strategy 50

8.6 Model 51

Section 4Ch9. Strategy 54 9.1 Foundation 54

9.2 Strategy Roadmap 55

9.3 Vision & Brand 56

9.4 Business Model 58

9.5 The Operating Companies 59

Ch10. Comm. Platform 60 10.1 Objectives 60

10.2 Road to Success 61

10.3 Content 61

10.4 Design 63

10.5 Organization 68

10.6 Marketing 70

10.7 Finances 72

10.8 Roadmap 74

10.9 Platform for Sales? 75

Ch11. Solutions 76 11.1 Objectives 76

11.2 The Concepts 76

11.3 1. Printer Improvement 78

11.4 2. Update 81

11.5 3. Print Store 83

11.6 Portfolio Management 85

11.7 Conclusion 85

Ch12. Evaluation 86

Ch13. Recommendations 88

References 90

Epilogue 94

I

Report StructureThis report describes the graduation project carried out within the Strategic Product Design master programme at the Delft University of Technology.

The report has been structured into a logical sequence, to provide the reader with a clear foundation leading up to the final strategy. The actual process used an iterative approach, repeating and re-evaluating steps throughout the progress of the project. In figure 0.1 is a graphic model of the report.

The report is divided in four sections. The first will cover an exploration of the paper industry and an internal analysis of Hello and PaperlinX. The second section will explore the communication industry, the commercial printing industry and the topic of communication platforms. The third section will cover the ideation of concepts for Hello. The fourth section will describe the selected final Strategy.

ResearchFor this report both literature and emperical studies have been conducted. Informal interviews, case study research, a shortlist of professionals formally interviewed, and more. To pursue clarity, the conclusions of these studies have been implemented throughout the entire report. Therefore the flow of the report for the reader does not have to be interrupted to discuss research methodology. Literature references are mentioned in the text and the list of interviewees are mentioned in the references chapter (page 90). The results and methods of the formal interviews and case studies can be found in the appendices.

AppendicesThe second report covers the appendices. In many occasions these will provide background information or visual representations of issues discussed in this report. It will be noted in the text when an appendix is of interest.

Reading Guide

Ch1. Paper Industry

Ch2. PaperlinX

Ch3. Hello Paper

Ch4. Focus

Ch5. Commu-nication

Ch6. PrintingMarket

Ch7. CommunityResearch

Ch8. Ideation

Ch10. Phase 1Community

Ch11. Phase 2 Solutions

Ch9. Strategy Ch12. Evaluation

Section 1: Paper Section 2: Printing Section 3: Concepting Section 4: The Strategy Evaluation

Fig 0.1 The structure of the report

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Introduction

This project was a cooperation between a number of different parties. The assignment was conducted together with Tan Brand Communication Consultants, a marketing and brand strategy agency from Utrecht. The project was done for PaperlinX, a large international merchant of paper and communication materials. It entails the development of a new business and service strategy for one of PaperlinX' brands: Hello Paper, therefore the client of this project.

PaperlinXPaperlinX is an international group of merchants of paper and communication material; for example, in the Netherlands they own the well known BührmannUbbens. PaperlinX' focus lies in four different strategic areas; commercial print paper, office paper, signs & displays and packaging material. The company’s main aim is with commercial print paper, paper aimed at commercial printers. A commercial printer is a company which business revolves around professional printing; to create brochures, magazines, business reports and many other products. Within the European market PaperlinX' biggest brand is Hello Paper.

Hello Paper

Hello Paper is a premium paper brand aimed at commercial printers. The Hello Brand started its life in 1997, initiated by BührmannUbbens. BührmannUbbens had many sales offices throughout Europe; in the UK, The Netherlands, Germany and many more. Each of these local offices were running their

own lines of paper. BührmannUbbens wanted to improve the coherence within the market, by creating one single brand which would be sold at all the local sales offices throughout Europe. This brand would have three different types of paper, available in a wide array of specifications.

Hello was officially launched in six European countries in 1998 and it replaced well over 10 existing brands. It became one of the first cross-country paper brands. Whether one would order it in Germany or Great Britain; the brand and product would be the same. This new strategy within the paper industry lead them to become the number 1 brand in their market in 2001, a position they hold to this day. The brand and its related marketing were originally created in cooperation with Tan Brand Communication Consultants.

Tan Brand Communication Consultants

Tan was started in 1997 by Kyle Talbot and Annelies Nagel. Tan offers strategic advice and creative communications to help companies develop their brand identity. Their clients range from business-to-business software developers, to bed manufacturers, clothing brands and paper merchants. One of Tan's main clients is the paper merchant PaperlinX. Since 1997 Tan has been involved with many of PaperlinX' brand launches and marketing campaigns. In fact, Tan was responsible for the initial launch in 1998 of the Hello Brand. Since then Tan has been one of the main sources for creative input for PaperlinX.

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Due to Tan's longlasting relationship with Hello Paper and their extensive knowledge on branding, this project was conducted at the office of Tan. At Tan it was directly supervised by Kyle Talbot, co-owner of the company, in close contact with Margreet Sloot, the Category Manager responsible for Hello Paper.

The Project

Hello Paper has always positioned itself as an innovative brand; innovation based on the needs of their clients, the commercial printers. Hello’s tagline is The Answer, they envision to be the answer to the commercial printer's needs. Due to a combination of reasons; branding, product quality, range of specifications and a broad distribution network, Hello Paper took the number one position within several years of their introduction. Yet, for the past couple of years this position has begun to crumble. Competing brands are catching up to Hello and Hello is no longer the defining brand in the market.

Problem Description

Differentiating a paper brand is difficult within the Commercial Printing Paper market. It is a crowded Business-to-Business market with up to a hundred competing brands. Though Hello Paper is the biggest, they only have about four to five percent of the market; leaving ninety-five for the competition. A troubling issue is the lack of differentiation in the product. Differentiation on a product level is close to zero,; the product is a commodity.

Hello Paper notices it is slowly losing ground to competitors. The possibilities to define Hello through its product and

branding are shrinking. In order to distinguish themselves, Hello realizes they should take a next step in a new direction.

Hello would like to focus more on the creation of services surrounding their business and their clients. A field which they explored in the past, yet to no avail. Driven by the possibilities the internet and online communication offers, Hello sees opportunities for their brand to extend in this field. They spotted a possibility in creating a professional online communication platform; useable for both the commercial printer’s and Hello’s own interests. Yet, the specific objective(s) or service(s) are still unclear.

The initial insight by Hello to move further into services surrounding the commercial printers seem justified, related to the lack of opportunities in product differentiation. What this service should entail remains to be unclear. Hello is considering creating an online communication platform for its clients, yet the exact reasons behind this need to be further explored. This lead to the creation of the following broad objective for this project.

Objective

“Design a strategy and service to elevate Hello Paper’s role within the commercial printing market, providing a path to move Hello Paper from a product brand to becoming a service brand.”

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The initial objective, described in the introduction to this project, is of a broad nature. In this first section the focus will be on paper.

Chapter 1 will explore the paper industry. In this chapter the state of the market will be researched, including the two main trends affecting the sales of paper. The structure of the market and its stakeholders will be defined, in order to generate an overal view on the industry and the power structure. Accordingly the following chapters 2 and 3 will dive deeper in PaperlinX and Hello; to discover the possibilities of both and to find out what the underlying reasons are for Hello’s unsuccesful (for them) attempts in the field of services were.

In the fourth chapter the conclusions from these analyses will come together to create a focus for the project.

Paper & BrandsSection 1

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CH. 1

Paper IndustryA steady future of paper has been questioned since the introduction of the personal computer in the 1970s. In actuality it turned out better than expected; up until several years ago the future of paper was still strong. Yet, throughout the past years the industry started to show cracks. In this chapter the focus will be on the analysis of the paper market for commercial printing.

1.1 The MarketIt is estimated that the entire paper Industry will decrease over the following years (table 1.1). These tables sketch the current and future market for paper. Hello is Wood Free Coated paper (see Appendix 1); a market which will be the least affected in the coming years. The least affected obviously doesn’t mean the market will be fine; sales in Wood Free Coated paper will decrease.

Even though this is a business-to-business industry, ultimately demand for paper comes from consumers. Two recent research studies, “The Future of Paper and Print in Europe”

initiated by The Stationers Company (NLK Associates, 2008) and “World Graphic Paper” by EMGE Paper Industry Consultants (EMGE, 2010), both acknowledge two main important trends in this market leading to this change.

1.1.1 TrendsSustainabilitySociety’s concerns for the environment goes up and down, affected by many different influences like the fluctuating economy. The issue that continuously keeps rising is the concern about the negative environmental impact of paper and print (Carli, 2010). Even though reading on a computer or any digital device may not actually be more environmental friendly, it doesn’t change the bad image of Paper. More importantly, it doesn’t change the fact that every product or service can and should be made more sustainable.This has a growing effect on the use and purchases of paper by many corporations, institutions and governmental organizations. In general this means a shift towards buying recycled paper and policies which reduce the usage of paper*. The reduction of paper usage is one of the easier steps,

Table 1.1 Estimated decreas in sales (NLK Associates, 2008)

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making it a starting point for many companies.

Within the paper industry this has been an important topic to approach. All of the large merchants and manufacturers have put efforts into improving their corporate sustainability; both internally and externally. Internally the recycling of paper has become the rule, instead of the exception, and the same goes for re-forestation. Externally many paper merchants and manufacturers have started creating campaigns to make people aware of the misconceptions which are existing around the sustainability of paper (EMGE, 2010). A difficult, already lost, battle since reducing the use of paper is always better. Many merchants have introduced high quality recycled brands over the years and for PaperlinX this is the brand Revive aimed at commercial printing (see chapter 2).

Change in MediaThe most important cause for the decrease in the paper industry is the change in the entire communication field. The innovations of the past two decades done in the digitalization of communication have an increasing effect on the sales of paper in the long run. The changes are difficult to grasp in a single sentence. The internet, social media, smart phones, the development of E-readers and iPads; it keeps on changing the

*Please consider the environment: Do you really need to print this report?

market environment for the paper and printing industry. It leads to publishers, advertisers and, basically every company, to move into digital media; further away from printed media. Though the effects of this change are noticed in the paper industry, they are most relevant to the print industry. Paper is the medium, but printing makes it a communication product. This topic will be further elaborated on in Chapter 5 and 6.

1.2 Market StructureIn figure 1.1 is a simplified representation of the direct value chain in the commercial printing market.

The manufacturer develops and produces the paper. They distribute the products towards the many merchants groups. Through the operating companies of the merchant group, the product is sold towards the commercial printers. The commercial printers process (e.g. print, bind) the paper into printed products, in assignment of their clients; the print buyers. Print buyers can be divided into two groups; creative agencies and corporate end-users.

Fig 1.1 The structure of the commercial printing market

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1.3 Merchanting

1.3.1 ProductMerchants are dependent on a small group of Manufacturers to supply the product. Throughout the years these manufacturers have been able to streamline the entire production process of paper. Paper has reached the end of its development stage. Since a small number of manufacturers supply ten merchanting groups, it leads to a product differentiation of close to zero. One manufacturer might use a double coating technique while another uses a special triple coating. The differences in use are neglectible; in some cases it is even the exact same product. When the paper for Hello comes out of the paper manufacturer, it will be wrapped and branded as Hello. Yet, the exact same paper will also be sold under the competing brands Garda, Magno and Triple Star.

1.3.2 ServiceThe Merchanting of paper is a service. Merchants are constantly trying to add and improve services, to build stronger relationships with their clients. An example of this is the improvement in the online ordering system; improving usability of the software, and customization possibilities for ordering paper. Another example is quicker delivery or the customization of product orders (per paper, instead of per pallet). Anything to remove the discussion further away from the focus on price, which has become more relevant again in this day and age (See chapter 6). The fact remains that advantages, on services, are always short lived. Within months after the introduction of a new service, competitors will have picked it up too. Then it depends on the relevance and quality of the additional service whether it is attractive enough to switch merchants. Even though switching costs are low, the industry is very stable; many of the merchant’s clients have

been with them for years or decades. This strong bond exists due to the personal approach: the personal relationships is very important.

Looking at Reimann, Schilke, et al. (2010), they define four main characteristics of commoditization: product Homogeneity, High Price Sensitivity, Low Switching Cost and Industry Stability. All of whom match perfectly to this field; the paper and merchanting industry is a commodity industry. The key-success factors in this business follow out of this: one is price, two is the distribution channel and three is the personal relationship.

1.3.3 MarketingThe commoditization of the market reflects itself in the marketing of the merchants and paper brands. Marketing within this field can be “Old Fashioned”. To keep or obtain clients, it is common to offer free gifts: dinner, golf trips, manufacturer visits, educational weekends and so on. Since the financial crisis this has started to decrease, but it remains to be a normal approach. A common factor in many business-to-business markets (Dwyer & Tanner, 2005).

1.4 Commercial PrintersThe main target group for Paper Merchants and Paper Brands are the commercial printers. The second group are the print buyers; creative agencies and corporate end-users.

There are a handful of large printers per country, but an incredible amount of small and medium sized regional printers. The large printers have to be innovative (or their equipment suppliers have to be) to remain on top of the market. The smaller regional printers are more conservative,

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offering a basic strong product. There are tens of thousands of printers in Europe alone. To put it in perspective, there are around 2000 commercial printing companies in The Netherlands alone, of which only 20% has more than 10 employees (CBS Centraal bureau voor de statistiek).

Commercial Printers can be viewed as Print Manufacturers. They combine a number of ingredients to create a printed product; paper, ink, printing plates, toner and more. For commercial printers paper is therefore an important ingredient. Commercial printers are dependent on merchants to supply them with this input of paper; it’s the merchant’s service that makes the commercial printer’s business run smoother. Whether that product is Hello or one of its direct competitors, the commercial printer will not notice. It’s the relationship between a merchant and a commercial printer that

counts.

1.5 The Print BuyersThe clients of the commercial printers are an enormous group; basically it can be assumed that every company needs (professional) print work, which makes most of these a possible client of commercial printers. Print Buyers can be divided in two different groups, based on who is in direct

contact with the commercial printer. In some cases this is handled by a creative agency hired by company X, in other situations it is directly handled by company X.

In its pure basics, Print Buyers will hire Commercial Printers for a print project. The Commercial Printer will produce the print work and deliver it to the Print Buyer. In this relationship the Print Buyers have an enormous amount of power; if they want a specific type of paper, or a specific paper brand, the commercial printer will use that brand. In figure 3.5 are the five main reasons for commercial printers to switch between paper brands (Opticom, 2007); lead by the needs of the print buyer.

For Hello this can be viewed as an important opportunity. The fact of the matter is; print buyers care very little about paper brands. What matters to them is the final product and that it fits their expectations; it basically depends on the performance of the commercial printer. It is extremely difficult for experts to tell the difference between paper brands; let alone the print buyers. Print buyers will of course have a preference for a specific kind of paper: if you are making a fashion magazine, you want a glossy paper for the cover. But, whether that glossy paper comes from brand A or brand B, does not matter.

In most situations the Print Buyers will select one or several commercial printers as approved suppliers, and the choice for paper brand is left up to the Commercial Printer. It is estimated that between 5-10% of the print buyers specify a paper brand.

Figure 1.2 Reasons to Switch brands (Opticom, 2007)

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CH. 2

PaperlinXPaperlinX is a young company. In 2000 it demerged from Amcor, a large packaging company from Australia. Over the years they have grown by acquiring many paper merchants from around the world, like Spicers Paper in Australia. PaperlinX acquired the Dutch company BuhrmannUbbens in 2003, immediately making Europe PaperlinX’ most profitable market.

Today the PaperlinX Group is one of the largest paper merchants in the world, selling over four and a half million tons of paper and packaging materials worldwide.

2.1 StructureThe headquarters of PaperlinX are located in Australia. The company is active in three different international markets: Europe, America and Australasia (i.e. Australia and Asia). In this project focus will be on the European market, and therefore the European division of PaperlinX. PaperlinX Europe’s head office is in Amsterdam. A small office of around 50 employees which mainly focuses on the Finances, IT, management and marketing of the entire group. 2.1.1 PaperlinX EuropePaperlinX is a Holding company. Within the European market the PaperlinX group owns local merchants in 18 different countries. BührmannUbbens is one of their main sales channels in The Netherlands, Robert Horne in the United Kingdom and Deutsche Papier in Germany. These

many merchants, or Operating Companies as PaperlinX addresses them, each work under their own flag (figure 2.1).

2.1.2 Operating Companies Regional FocusClients for the PaperlinX group range from small companies to large international companies; a local printing company buying commercial printing paper or a multinational like Shell buying office copy paper, and everything in between.

Fig 2.1 PaperlinX Structure

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In order to serve these local companies a local approach is likewise used. For example, BührmannUbbens in the Netherlands has three regional offices (figure 2.2) which each serve a specific area in The Netherlands. This method is used by each Operating Company in the PaperlinX Group across Europe. This leads to a highly regional focus from the operating companies, and to some extent each Operating Company has their own agenda (e.g. making their sales quota for that year).

2.1.3 Outsourced manufactureringThe fact that the PaperlinX Group focuses completely on merchanting, mean that they do not actually make the products themselves. The paper is produced by external paper manufacturers. Within this industry this is the logical structure; there is a division between merchants and manufacturers. Hello Paper for example is made by one of the world’s largest manufacturers; Sappi. There is a short list of around ten large manufacturers, which make the paper for around a hundred different brands of paper in the European commercial printing market. PaperlinX uses several of these manufacturers; some products are even produced by a list of manufacturers.

PaperlinX focuses on the distribution, sales, branding and marketing of it. PaperlinX pursues a House of Brands strategy (Rao, Agarwal, et al., 2004) and it functions as a managing holding for its operating companies (e.g. the local merchants).

2.2 Product BrandsPaperlinX Europe and its Operating Companies distribute a long list of different products. The core of their offering can

be divided in four different strategic areas; commercial print paper, office paper, signs & displays and packaging. Due to the structure of the PaperlinX Holding, many local merchants offer various other additional products. The additional products range from printing press equipment, ink and even printing work flow software. In reality this means that the portfolios differ per operating company.

PaperlinX distributes both a mixture of in-house brands and external brands. PaperlinX aims to generate 35 percent of its profits from the in-house brands and have them available at each of their merchants, all across Europe. PaperlinX earns 65 percent of their profits through the distribution and sales of external brands. These are brands developed by companies outside of the PaperlinX Group. Some of those brands

Fig 2.2 Regional Offices BührmannUbbens

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even compete with PaperlinX’ in-house brands. This is the common approach in this market, due to the separation of merchants and manufacturers.

PaperlinX has a portfolio of their own brands in each of the four strategic areas (Appendix 3). The focus of this project lies with the strategic area Commercial Print.

2.2.1 Commercial PrintThere are three main brands in Commercial Print, Wood Free Coated paper portfolio: Hello, Core and Revive (figure 2.3).

HelloHello is the premium Wood Free Coated paper brand. It is available in four different surface finishes; matt, silk, gloss and fat matt. The product is produced by one single manufacturer (Sappi), which creates a higher level of consistency in the paper. The product is available in an incredible range of variants: grammages (weight and thickness of paper), sizes (size of each sheet) and volumes (amount of paper per order). The customization possibilities make it a broadly applicable product, the single manufacturer promises consistency which combined makes it the premium brand.

CoreCore is positioned as the basic brand. It is available in two different surface finishes; silk and gloss. The product is produced by four different manufacturers leading to a lower level of consistency (whether this difference is discernable may be questioned). The product is available with less specification than Hello; only in the most commonly used grammages, sizes and volumes. Core is therefore aimed as the basic solution to the commercial printer’s day-to-day printwork.

ReviveRevive is positioned as the recycled brand. The product is available in the three different surface finishes; matt, silk and gloss. The product is further more available in different levels of recycled paper contents; 25%, 50%, 75% and 100% recycled. Though the product is within the same market as Hello and Core, it can be viewed as a subcategory. The product is more interesting for the End User (e.g. Philips, BMW), with an elaborate CSR plan, due to the sustainable nature of the product. Revive is therefore positioned as the high quality sustainable solution aimed at large corporations and printing companies for which sustainability is an important issue.

The price difference between Hello and Core is marginal; 2 to 5 percent depending on the agreement between operating company and client. Revive is on average 20 to 25 percent more expensive than Hello and Core.

2.2.2 UplinXAn additional company, part of the PaperlinX group, worth mentioning is the company UplinX. UplinX is a premedia solutions group.The group consists of a number of different products and companies which offer software solutions to the print industry (Appendix 4). The company is one of

Utility/Quality (as positioned in Portfolio)

Sal

es P

rice

a new age in recycled paper

Fig 2.3 Wood Free Coated Paper Brands

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the largests in its market. They have several brands in their portfolio and operate in the United States, Australia and Europe.

2.3 ServicesUp until now the structure of PaperlinX and the product portfolio have been explored. To understand the full aproach of PaperlinX it is necessary to know how they supply their services, marketing and sales.

It is a competitive field and distinguishing a merchanting company in services is difficult. The focus for the operating companies of PaperlinX lies with making their clients life easier, by reducing their costs and reducing their workload. For BührmannUbbens and Proost & Brandt. An example of this is the possibility to customize the size of the paper or the quantity down to single sheets.

2.4 Marketing Within the market, and with the right target group, the PaperlinX brand is known. Yet, in actuality clients are mostly familiar with the brand of paper and the operating companies that sells it. PaperlinX is the global holding and their marketing and promotional resources are spent on the marketing of the exclusive in-house brands of their portfolio. PaperlinX focuses on the europe wide marketing activities of each of the in house paper brands. Yet, even though Core, Hello and Revive all function in the same market place, their target groups are of course different. Though both Core and Hello are aimed at commercial printers, Revive is aimed at the end user; the group for which sustainability is high on the agenda. In the following chapter the efforts for Hello will be discussed.

Since the local sales representatives are responsible for the sales of the products; a large section of the campaign is spent on the promotion of the brand internally.

2.5 Sales

2.5.1 Personal SalesWith most clients the operating company has a long lasting relationship; clients do not switch merchants often. In most business-to-business service provision the management of relationships, between customer and employee, is an integral element (Bitner et al., 1994). The foundations for the customers’ perception on quality are formed during the personal contact, and are largely based on emotion. Though the products and technological systems backing up the service (e.g. product delivery), are of great importance; the service encounters between client and employee are the face of the services (Yastrow, 2007). The management of relationships is the single most important factor in the business of the Operating Companies; the sales representatives make or break the company.

2.5.2 Online SalesOne of the main changes within PaperlinX’ operating companies for the past decade has been the move towards online sales channels. Currently around 15 to 20% of sales are through an online sales website, without interference of employees. Yet, related to the previous mentioning of the importance of personal relationships between employee and client, an average of 80% is ordered by a personal phone call or by an e-mail to the usual sales representative.

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CH. 3

Hello PaperBührmannUbbens, which originally started Hello, wanted to create a brand and a product with a vision based on the wishes and needs of their clients. Hello was officially launched in six European countries in 1998 as one of the first cross-country paper brands, replacing well over ten existing brands. In 2001 they became the number 1 paper brand in their market, a position they hold to this day.

When Hello was launched it created a stir within the commercial print market, a highly competitive market in which sales were led by the price of the product.

3.1 Brand and Product3.1.1 Cross-country BrandThe main reason for the succes of Hello is the fact that it was one of the first europe wide brands; previous to Hello most merchants (i.e. operating companies) each had their own line of brands. Hello replaced a number of those brands and made it known across Europe.

3.1.2 Brand VisionHello Paper was created with the vision that it was the response, the answer, to the needs of its customers. This

vision is strongly pursued through Hello’s complete identity; marketing, advertising and promotion (see Appendix 6). This vision is one of the core values that made Hello the biggest brand in its market. Hello was the first paper brand that talked and listened to their clients; and used that throughout their branding.

3.1.3 ProductOne of the main strengths of Hello has always been the quality and diverse specifications of its products; the different papers (Figure 3.1). In the previous chapter it has been discussed how Hello compares to the other brands in the PaperlinX portfolio. All the paper for Hello comes from one single manufacturer, which therefore creates the highest consistency in the product. Furthermore, Hello is available in a broad range of grammages, sizes and volumes. The paper can be ordered to the exact specifications of its client; making the job of their client a lot easier. A study by Hello Paper with 2500 printers from thirteen European countries, confirmed that the Consistency in quality of Hello’s products was most noticeable. (PQR, 2007). Today, the products of Hello are

Fig 3.1 Hello Mission, Vision, Values, products

“For PaperlinX Hello is the most important brand, a brand with a lot of potential.”

Roberto Cavicchia, Category Director PaperlinX

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The Answer

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basically as good as they can be.

For the last couple of years Hello has therefore focused on adding new product lines to its portfolio. This year Hello will launch Hello Hot Silk to the market; a paper with an improved silk surface quality and faster ink drying and runnability. Hot Silk is more expensive than Silk, yet due to its improved printing speed it can actually become cheaper for specialized printing companies (which want to run the maximum amount of print jobs per day). To make things clear, Hot Silk was developed by manufacturer Sappi, and is already sold under the Sappi Tempo brand.

These products extend the Hello brand into niche areas. They are more expensive and specialized products; and are either only used for special print jobs or by commercial printers with specific needs.

3.1.4 ServiceHello has always distinguished itself through its products and services surrounding those products. For example, when the Hello brand was introduced they promised a 24 hour delivery service, which at the time was desperately needed by the commercial printers. Yet, over the years these services started to lose its value and recognition. The regional operating companies which were basically responsible for the provision of these services (they distribute and sell the product), started offering them on all the brands they distributed. For the operating companies this was a necessity, due to the fact that competitors also started offering the same services on all brands. Once both the basic brand and the premium brand are delivered within 24 hours, Hello loses its advantage. Hello’s clients see the brand as a steady and reliable player within the market; good price, broad offer and useful catalogue.

Hello was not recognized as a distinctive brand and clients do not know what services they offer (PQR, 2007).

Sample Book

Promotional Website

Product & Packaging

Advertising (Magazines, online)

Online Ordering and website

Delivery of orders

Office Sales Representative

Traveling Sales Representative

Trouble Shooting Representative

Training Courses and Special Events

OperatingCompanies

Fig 3.2 The division between service touch points and brand touch points

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3.2 Sales

Up until 2005 Hello Paper had a steady yearly rise in the sales of their products. Yet, since then sales have stalled and during the financial crisis they decreased heavily (figure 3.3).

The reasons for this decrease are multifold. First of all there is a decrease in the entire sales of paper products due to the change in the communication industry. Paper has an increased competition from other communication mediums, which are expected to grow throughout the following years (EMGE, 2010). Secondly Hello has been dealing with fierce competition, both through improved branding and marketing from competing paper brands. A third factor is caused by the mergers of competitive merchants, which increased their

distribution channel(s) beyond that of PaperlinX (and Hello).

3.3 MarketingWhen Hello Paper was introduced on the market they showed that a lot could be obtained with proper marketing, promotion and branding in this market. Over the years they organized many marketing campaigns, using various

tools. The tools used for marketing by Hello Paper range from advertisements, folders, magazine inserts to gifts for clients. The marketing is smart, clear and promotes the values of Hello: Fresh, Pioneering, Sophisticated and Active. Each year the brand has one or more marketing campaigns, depending on whether a new product is launched or if sales are decreasing.

The touch points between Hello and their clients are mostly related to branding. Due to the structure of this industry, the role division between PaperlinX, Operating Companies and Paper Brands, Hello focuses on promotion and marketing.

3.4 CompetitionCompetition to a paper brand can be viewed on a number of levels. On a product level it can be compared to competing paper brands; even to competing merchants. On a broad level paper is competing with many communication mediums. This will be further explored in chapters 5 and 6, this paragraph will provide an insight into the competition of paper brands and merchants.

There are around eight to ten large merchanting groups in Europe and each of these merchanting groups has a number of Paper Brands in its portfolio. As the analysis in chapter 1 (see figure 1.1) showed; this leads to a high number of competitors. Competitiveness between merchants is low. Most commercial printers remain loyal to their main merchants; leading to longlasting relationships.

Due to the commoditization in the market there is little competition on products or services. Antalis/Arjo Wiggins are the main competitor of PaperlinX; they are the largest

Fig 3.3 Sales Figures of Hello Paper

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merchant with the biggest distribution channel. But, all merchants offer great services and have great personal relationships; two of the key-succes factors. The distribution channel is the third key-success factor through which merchants can still define themselves.

The paper brands, as discussed in chapter 1, mostly define themselves through their branding. Again, due to the commoditization, it can be stated that there is no competition on a product level (with the exception of niche markets). Due to the regional focus of the entire market there are many local brands available and there are a lot of competing brands to Hello Paper. In table 3.2 the top 15 of European Brands is given, researched by Opticom (2007). Hello is the number one brand, yet PaperlinX estimates the gap between Hello and number two is continuously decreasing every year.

The most well-known brands in Europe 2009An analysis of the brand awareness of Wood Free Coated Paper brands in Europe (Opticom, 2009)

1 Hello PaperlinX2 Maine ArjoWiggins3 Profi Igepa4 Novatech Antalis5 Satimat ArjoWiggins6 Garda Lecta Group7 Luxo Papyrus8 Magno Sappi9 Creator Lecta10 Lumi Stora Enso11 Condat Lecta12 Galaxi Inapa13 Claro Antalis14 Chromomat ArjoWiggins15 Burgo Burgo

Brand Merchant Group

Table 3.2 Most Well Known Brands

3.4.1 ServiceAfter an extensive analysis of the market, it was concluded that offering services around Paper brands are an uncommon approach. The largest part of the paper brands focuses exclusively on marketing. There is a clear division in this between merchant and paper brand. The merchant provides the services relevant for the commercial printers, the paper brand focuses on the product and it’s marketing; Hello’s approach is no exception in this (see figure 3.2). There are little to no services which are paper brand-specific. Some marketing efforts might be viewed as a service in the broadest sense of the word: the organization of design contest, a company magazine; yet they never add honest practical value to the commercial printer.

3.4.2 MarketingDue to the lack of product and service differentiation, marketing becomes the defining factor important factor for the brands within this market. Most of the largest brands (e.g. Novatech, Garda, Lumi) focus heavily on marketing and branding. Each of the brands position themselves through a specific brand identity. Sticking to the earlier mentioned brands; Novatech’s identity is driven by technology, Garda focuses on Fashion and Lumi focuses on nature. Though the products don’t differentiate, the brands do. Yet, as was already mentioned a number of times; the merchant (e.g. operating company) makes the difference. Brands are of lesser value, which is no surprise considering how they are used in this market.

In Appendix 7 a more in-depth analysis of the competition can be found.

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4.1 Product Innovation

The products of Hello are of high quality and on this level there is no doubt from the clients point of view; Hello is a premium paper brand (PQR, 2007). Within this area there is little room left for further innovation. Each paper could have even faster ink drying and other improved features, yet it is not a necessity for the commercial printers. The expected introduction of Hot Silk, a paper which allows for faster print production, is a product aimed at a niche in the commercial printing market. Only printers with an incredibly productive printing process will benefit from using the more expensive Hot Silk.

Niche markets are currently a field in which many paper brands are heading, because there is little to gain with the core products. This decreasing need for product improvement shows in the fact that it has been well over four years since product innovation was introduced within Hello’s paper. More importantly, the product is developed by an external manufacturer and the formula for the product is not restricted to Hello. For example, Hello Gloss is the exact same product as competitor’s Antalis’ Triple Star and Hello Fat Matt is the exact same product as competitor’s Garda Cartiere’s GardaPat 13. The to be released Hello Hot Silk is the exact same product as Sappi’s Tempo paper. A product portfolio can be extended into niches, but a paper brand can hardly define itself through its products. This leads to a focus on branding.

4.2 Differentiation in BrandsWithin the portfolio of PaperlinX the differences in the products of Core and Hello may be neglected. Where Hello does distinguish itself is through it’s broad offering. Hello is available in a large amount of different formats (grammages,

FocusCH. 4

Hello is in a difficult position. Their sales are decreasing and the market is becoming more competitive. Hello has proven in the past that it is possible to add services to a paper brand. Yet, due to the complex structure within PaperlinX these services are often short lived. Something must change. Building on the expertise which was gathered in the previous three chapters a number of conclusions has been drawn to give focus to the project. These are discussed in this chapter.

“To define Hello in its products would mean moving to a higher level. That just does not match the Hello Brand. Products like Hello hot silk are never a replacement for the standard Hello products; they are in a niche.”

Ralf de Jong, Price Benchmark Coordinator PaperlinX

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size, volume; Appendix 5), which makes it versatile brand. That is what makes Hello a premium brand. The brands do not differ much in product quality. Branding makes it possible to position them in PaperlinX’ portfolio and in the minds of the commercial printers. It improves market coverage by providing commercial printers with a choice, even though the differences are marginal.

Opticom (2007) does a yearly Brand Equity analysis on the paper market. It focuses on the Brand Awareness of the paper brands. Comparison of the products itself does take place, but the outcomes differ very little due to the commoditization of the products. Yet, to what extent the paper branding makes a difference within this market remains to be difficult to pinpoint. Most research on branding, brand awareness and brand equity has been focused on the the Business-to-consumer market. In Business-to-Business the levels of importance have always been questioned. Interestingly, Fern and Brown (1984) question whether organizational buying (i.e. buying in a Business-to-Business context) is in fact that different from consumer buying. They found that the risk for the organization is most important, while personal preference and the risk of personal failure are also two very important factors in the selection of a brand. This is similar to Business-to-Consumer markets, as Bernoff & Li (2008) summarize it in a single sentence: “Businesses are people too”. Hutton (1997) further explored brand equity in an organizational buying context and actually found that brand equity exists in business-to-business. It was found that buyers were indeed willing to pay higher prices for certain brands. Yet, higher levels of commoditization in a market decrease the value of brand equity; and this makes a difficult issue in the paper industry. What is the level of commoditization in a specific product category like Wood Free Coated Paper?

Interestingly enough, the Opticom (2007) research report focuses mainly on Brand Awareness. In fact, the analysis of the market showed that most paper brands focus exclusively on creating brand awareness. Davis et al. (2007) found that within B2B commodity businesses, company resources are better spent on programs assuring a consistent product brand experience through a higher level of value, service or employee training, than investments in building brand awareness, such as advertising. Currently, all paper brands including Hello focus exclusively on creating awareness. Whilst research proves the value of building services around the brand. Yet, most literature focusses on services which are offered by the supplier, not the product brand itself (Hill, McGrath, et al., 1998).

The fact remains that focusing on creating awareness is an easier solution than actually adding value to the products brand equity, if the product is a commodity (Reimann, Schilke, et al., 2010).

4.3 Diffusion in StructureIt is not that Hello has not pursued services surrounding its products throughout the years. The effect of it has often been overshadowed by the Operating Company’s brand. The PaperlinX group grew to a large holding within a marginal time period of ten years. The fast growth of the group shows the power and strength of PaperlinX, yet it also leads to many internal organizational issues. The operating companies are largely responsible for their own wellbeing. PaperlinX is constantly in the process of aligning their operating companies, to maximize the value chain. It confuses the clients; within the Netherlands both BührmannUbbens and Proost & Brandt fight for their business. Odd considering they are both part of the PaperlinX group.

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This all has an effect on the in house brands of PaperlinX. Due to the complexity of the group, one of the most important factors is internal marketing. PaperlinX develops a new product line extension or a new product brand, yet thousands of local sales representatives from 14 different countries have to sell it. PaperlinX puts great efforts in streamlining this internal marketing process, yet it does cause problems in the creation of product brands which are dependent on one strong coherent message throughout the organization.

It is a troublesome issue for Hello to pursue services surrounding the brand and products. Simply because the client does not recognize or acknowledge them as Hello’s services. This is a common issue in Business-to-business markets. The branding of products and their services is difficult due to the issue that the product brand comes second to the firm brand (Gordon et al., 1993). Hello suffers the same consequences. The quality of service, the people offering the service and the relationships between brand and client are linked to the operating company selling the product, instead of the product brand itself (Berry 2000, Gordon et al. 1993). In this market the product brand is mostly used as a logical way to distinguish between the different products that are on offer (Sinclair & Seward, 1998, cited by Davis et al., 2008); Core is basic paper and Hello is premium pape . The defining brand in this equation is the operating company, not the product brand.

This is the main problem which diffuses Hello’s positioning as a brand which adds services to its products. Hello’s touch points with their clients are completely focused on branding (e.g. marketing, advertising), whilst they are dependent on the Operating Companies for their services (see Figure

3.2). Hello can promise 24 hour delivery, but the Operating Company delivers on that promise. For Hello to pursue the improvement of their service offering and become a service brand, it is of upmost importance that the client is able to relate the services (exclusively) to Hello.

Hello needs services which are completely their own and for the largest part not dependent on the Operating Companies. It will allow for Hello to pursue a strong and consistent message, without diffusion caused by the operating companies.

4.4 Brand ExtensionThis change in the market and a decreasing demand for innovation in paper, has made Hello’s current vision to slowly start losing its value. Hello has build a strong vision, to answer the needs of their clients. Yet, they only offer the answer through marketing and through their paper products. Which is completely logical , yet clients needs in paper have been answered. Roscam Abbing & van Gessel (2008) acknowledge this shift from creating compelling brand promises (e.g. the answer to the printer’s needs) to fulfilling on those promises in a meaningful way. The latter has become the possible next step for Hello. Hello is a strong brand, their product has reached its potential; how can they maintain this image with their clients by fulfilling their needs?

Due to the lack of innovation in its products, Hello will have to extend its brand in a new (product) category in order to pursue this vision. Brand Extensions are very common; more often than not they are a financially effective method with a higher chance of succes for companies to introduce new products or services; compared to introducing a new brand (Aaker & Keller 1990, Ries & Trout 1981). Estimating the

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success on beforehand is difficult, due to the dependence on many untangible factors (Hem, Chernatony, et al., 2001). Most research confirms that brand extensions are more easily accepted if the brand has a reputation of high quality (e.g. Aaker & Keller, 1990). Ambler & Styles (1996) found that brand extensions are more successful if they are more similar to the core product. Sinek (2009) argues that the core vision of a brand is the defining factor in proper brand extension. Sinek mentions Apple as an example, whose vision is aimed at the creation of beautifully designed, innovative and user friendly products. This vision has lead Apple successfully into several product categories, straying from their core focus on computers. Something that Dell for example never succeeded in. The acceptance of brand extensions is a highly psychological process in which; the level of quality, similarity to the core product category, the brands vision (and reflected brand image), the risk of purchase (related to the expected quality) and the innovativeness of the client are all combined.Building on these insights Hello has advantages for brand extension. The brand has a high perceived quality and a great

vision to build on. Yet, Hello is currently completely focused on paper; to find similarity in a new service will be near to impossible. Furthermore, services often lead to a higher perceived risk of purchase, due to intangibility and non-standardization of services (Zeithaml, Parasuraman, et al., 1985). The brand has also been losing its value. Hello’s clients no longer view them as innovative in the market (PQR, 2007).

There are opportunities for Hello to extend its brand, yet it should be properly analyzed whether the extension matches the current brand. A re-positioning strategy might be a necessity to move into a new category.

4.5 Target GroupFrom the analysis it could be concluded that the print buyers have a lot of power in the choice for paper brands. If a print buyer has a preference, the commercial printer will comply. The emphasis in that sentence should be on if. The initial research shows that there is little interest in paper brands from the print buyers side. The print buyer will have a preference in type of paper (glossy, silk, matt, white, ivory, etc) yet brands have usually little value to them. Though this provides an opportunity, to get Hello embedded in the minds of print buyers, it is held back by the fact that their interest is low and they are a difficult group to approach. In 80-90% of the cases it comes down to the commercial printer for the choice of the paper brand.

Both the commercial printers and the print buyers will be explored in the following section, but the general focus will remain with the commercial printer.

Figure 4.1 Commercial printer Robert Bosch

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4.6 FocusBased on this analysis the focus for this project will be directed at the following.

4.7 Conclusion

Based on this Focus the next section of the report will dive into the commercial printing market. It will explore the needs of the commercial printers, the relationship with their clients and their role in the communication industry.

The vision that Hello should innovate and approach services independent from the Operating Companies lead to an

exploration of online services and communication platforms. An online platform would allow Hello to act independently from the operating companies, due to the fact their business would be online and not directly dependent on the operating companies for delivery of services.

Hello needs services which are, for the largest part, independent from the Operating Companies. Hello must be in control.

Hello is a premium paper brand. �e operating companies focus mainly on decreasing the costs for their clients by offering smart logistical services for example. A highly relevant issue for the clients, yet more difficult to implement for Hello, if they wish to be independent from the Operating Companies.

Hello has the opportunity to focus on services which add value for the commercial printers; by improving their position or revenue. In this the role of and the relationship with the Print Buyer is essential to explore.

Goa

l 1. Innovation independent of the operating companies

2. Services focusing beyond paper 3. Adding value to the business of the commercial printers

Hello has always been dependent on the operating companies for the delivery of their services. �e client therefore does not see these services as Hello’s and the operating company receives the ( justified) credit. Hello should innovate independently from the operating companies, without becoming dependent on the operating companies resources. Hello should be in control.

A solution could be found in an online platform. �is would allow Hello to remain in control; through online platform regional touch points become less important.

In order to move towards becoming a service brand, Hello will have to innovate based on the needs of their clients.

�e analysis has showed that needs of clients related to paper have been answered. Building services around paper, might not directly lead to higher paper sales.

Hello positions itself as �e Answer to the commercial printer’s needs, yet currently this is just a promise. It is time to fulfill this promise, and use it as a vision for Hello’s services in the future. Hello should extend their brand beyond paper, and be the answer to the needs of the commercial printers.

Given the negative projected growth of the paper industry, entering more promising markets can also reduce risk for Hello.

Hello must innovate through adding value to the commercial printer’s business; value which improves their position and revenue.

Sum

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Though Hello had initiated a number of interesting services in the past, up until now Hello has always been dependent on Operating Companies to deliver them. In this divergence between paper brand and operating company, the latter wins in power. It was concluded that Hello should therefore develop innovations which are for the greater part independent from the Operating Companies.

It was found that Hello’s strengths lay in it’s high brand awareness across Europe, and their image of consistent quality. Hello wants to be The Answer to the needs of their clients. This provides an excellent platform for innovation, which should therefore be driven by the needs of the commercial printers and their clients, the print buyers.

In this section the printing market will be further explored, to find out in which areas Hello can support their clients, to spot opportunities. Chapter 5 will discuss the communication industry, chapter 6 the commercial printing market and chapter 7 will explore online communities; due to the fact this has been considered an opportunity by the author of this report and Hello.

PrintingSection 2

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CH. 5

CommunicationThe paper industry is basically dependent on the printing industry. The change in the printing industry is a big one, lead by the fact that the entire communication industry has changed. Before the commercial print market can be further discussed, it is essential to understand the changing role of printed communications, the print product, within the entire communication industry.

The communication and information market is changing. This change has had its largest effect on paper and printed media. Overall sales in commercial printing are expected to decrease 2 to 5% each year for the next 10 years (EMGE, 2010). Most commercial print communication is used for marketing, advertorial and promotional use. Advertising expenditure is a common meassurement linked to commercial printing sales and advertising expenditure is expected to fall 22% in magazines and 25% in newspapers; while ad expenditure is expected to rise 8% in internet, all during the next 3 years (ZenithOptimedia, 2010). Everything points towards a difficult future for commercial print and paper.

5.1 Broadening of the marketOne of the main changes is the move towards online communication; annual reports can be downloaded from corporate websites and newsletters and magazines are, for example, turned into online content. The focus has moved from the, for example, company’s brochure to the company’s website as the main focus point. A logical effect looking at

the different communication channels which are currently available. Fifteen or twenty years ago print was always the logical direction; it was much easier and relatively cheaper than Television or Radio. Today there are many more media available and people are scattered, using many different types of communication (Anderson, 2006). Yet, communication budget within companies are not increasing with this change (ZenithOptimedia, 2010). The same budget which a number of years ago would be spend on TV and Print, suddenly needs to be spread across six, seven or eight different communication mediums (Webb, 2010) (see figure 5.1).

5.2 Dynamic is ConvenientA further movement away from print communication is the fact that communication is increasingly becoming more dynamic. Where we would obtain our news through a television news program or a news paper, fifteen years ago, today many have shifted towards the internet and free online websites for their news. In fact, today we even obtain news from around the world within seconds through twitter

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(Anderson, 2006). Information and communication have become dynamic instead of static. People can read, watch, listen, react and share within a single medium; the internet offers the opportunity to create a dialogue surrounding communication (Kagan, 2008). Another practical example can be found in E-mail marketing. Many companies have included E-mail marketing in their structure; all because it’s an easy and fast tool to deliver a message. An E-mail campaign can be created and distributed in a single day, even within hours. This change of dynamics in communication has been making

print less and less relevant. More importantly, print is a static product; once it is created it cannot change.

The choice for a certain communication medium has always come down to the convenience of it. The convenience of the time, price and reach of a medium (Leonhard, 2010). Today communication takes this convenience a step further due to the ability to constantly adjust it. The website can be adjusted at any moment of the day and with twitter, Linkedin and facebook companies can have conversations with their clients. Paper cannot do this.

5.3 The role of PrintThis change from static (Print, TV, Radio) to dynamic (Website, Mobile, E-Mail, Social Media) has lead to the fact that print is no longer the main focus of communication. It has become a once-a-day medium, for example; a magazine, book or news paper. The internet (e.g. social media, website, mobile) is used throughout the day, for many different needs in many different contexts (Microsoft Advertising, 2010). Print is simply losing relevance and becoming secondary.

“Paper is very static, and the website is dynamic. And that’s the future, constant change… Paper will take on a supportive role.“

Els Teunissen, Graphic Designer.

Print

Radio

Television Print Print

Television

Website

SocialMedia

Mobile

Radio

SearchMarketing

Future?

Fig 5.1 The spread of the communication budget during the 1990s and the communication market of today

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born after 1995, the year the internet was introduced to the public; they grew up with the internet. Facebook opened its digital doors in February 2004 and today* Facebook has five hundred million active members which have been online in the past 30 days (Facebook, 2010). It shows the fact that the communication market is changing incredibly fast. It is near to impossible to predict what will have changed in another five

years. What the market will look like in 2015 or even 2020. It is expected that the market for commercial printing will decrease. The change in the role of the print product, will demand a change in the role of the commercial printer. This will be further explored in the following chapter,In the following chapter the expected decrease within commercial print is further explored and the effect it has on the market and the commercial print companies.

This change leads to a new focus for print. It is not dissapearing, of course. Print will become increasingly more extreme in its role, since its role as the common medium will decrease. Print will be used as a highly low budget product and, the other extreme, a luxury product (Microsoft Advertising 2010, Webb 2010). The latter being interesting for a premium brand like Hello. The change can already be noticed, simply compare a current copy of your favorite magazine to one from five years ago (e.g. Autoweek); most likely it will have become better produced with better paper.

5.4 ConclusionThe communication market will continously keep on changing. 70 million people in the European Union were

Fig 5.2 The Kindle, The iPad and the QUE ProReader. What will it mean for the printing industry?

“We sell luxury, and at the moment print is the only medium that can truly, tangibly express the level of luxury and quality of our actual products.”

Danielle Sala, B&B Italia

* 13 September 2010

“We get more jobs, but in smaller print numbers. For example; Of this pop-up book only 300 were printed. Within the clients budget they could have easily printed 3000, if they would have chosen a simpler design.”

Peter Lagerweij, CEO Printer Libertas.

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6.1 The Market

Commercial printers are businesses which offer printing services to the market. A research from 2005 showed that there are around 78.000 commercial printers (Ernst&Young, 2009) in Europe; these are the possible target group of Hello.

This is in fact an estimation, because the number of printers is decreasing. The printing market has been under a lot of pressure by both technological and social changes in the world. The need for printed communication is simply decreasing and the role of the printed product has changed.

Within Europe the market consists for 72% out of Small Printing Enterprises, of less than 50 employees (Ernst&Young, 2009). In fact, the total number of employees working in this field rank around 552.000 (statistics from 2005; Ernst&Young, 2009); this includes both large and mid-sized companies, and it means an average of around 7 employees per company.

Therefore there is a relative high number of small companies.These many small companies focus on specific regions (e.g. Delft has ten commercial printers, which mainly focus on Delft and the surrounding area). These are the main target group of the merchants and Hello paper. Most large printers, focusing on big productions quantities like magazines and

CH. 6

Print MarketThe importance of the printed product is decreasing within the entire communication industry. This change has had enormous effects on the commercial print market. Increasingly the product is becoming a commodity and many printers have been forced to file for bankruptcy. In this chapter the print market will be explored, leading to opportunities for Hello Paper.

80%

70%

60%

50%

40%

30%

20%

10%

0< 50 50 - 250 > 250

Employees per company

Fig 6.1 Number of employees per commercial printer

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news papers, buy their paper directly from the manufacturer or they have large contracts with a few merchants. Next to this they have a lot of knowledge in house (and therefore are less likely to look at Hello for special services). They work without much interference of a merchant or leverage of brands. Therefore the focus will be on small to mid sized enterprises.

6.2 Commoditization of PrintingThe Impression of a Printer (figure 6.2) shows the way commercial printers experience the change in their industry. The commoditization of paper is a logical conclusion after the analysis of the paper market (Reimann, M., O. Schilke, et al., 2010). Due to the changes in the communication market the sames is happening in printed communications.

6.2.1 Decrease in SalesChapter 5 on the communication market showed the change and the effect it is having on print communications. Basically paper and print are a static communication medium; once it is printed it does not change. The entire communication

market is broadening, while the percentage of printed media is decreasing. Viewing this as a percentage of the United States Gross Domestic Product, as one of the largest print market, gives a broader idea of the extent of the decline (ERC Research, 2010). In 1993 the printing industry was at its peak with a total of 1,22% of the American GDP. If this trend of 1,22% would have continued through the years, the print industry would now total 176,2 Billion Dollar. Today it is only 88,2 Billion Dollar, or 0,61% of GDP. The total sales of today are almost equal to those of 1993. The production capacity of today’s commercial printers is simply higher than the demand for printed products.

6.2.2 AutomationThe difficulty to define oneself can be linked to the automation within the print industry. Fifteen years ago, even ten years ago, printing was more of a technological craft. Separating the colors Cyan, Magenta, Yellow and Key/Black in a full color document to be able to print it through offset (see appendix 1), would take over an hour. Today one of the many Adobe programs can do this at the click of a single button. The craft is decreasing in the process. Almost each

Fig 6.2 impression of a commercial printer, inspired by Competitiveness of the European Graphic Industry (Ernst&Young, 2009).

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printer can now do the exact same kind of work as any of its competitors. The effect of this is that many printers have started to focus on perfecting the printing process in order to lower the prices. Leading to the commoditization of print. 6.2.3 Technological Mind-setThis focus on automation rolls out of the technological mind-set of the printers. Printing has always been a manufacturing business. The ones that distinguished themselves usually did this on technological advantages. In today’s market this is no longer valid (Ernst&Young, 2009). Commercial printers should be pursuing innovation driven by the customer and the market. Though the mechanical life of printing presses is still twenty to thirty years, the relevant marketing life of it might not even be five years (Webb, 2010). Most printers are

still stuck with high investments in printing presses which are no longer relevant in today’s market; or they simply don’t realise how to make it relevant in this market. Printers are still approaching their company from a technological stand point, whilst the technology has become the commodity in the equation.

6.2.4 Printing in the EastA side effect of this is the threat of emerging Asian and Eastern European competitors (Ernst&Young, 2009). The lower labour costs in these regions make it even cheaper and

many large print jobs are increasingly outsourced to these countries. The eastern European market is in fact one of the few currently on the rise within Europe (EMGE, 2010). This added level of competition to the (Western) European printer increases their problems even further. Though Hello sells their product in both western and eastern Europe, the commoditization of print can never be a good thing if you are a premium paper brand.

6.2.5 Financial CrisisIn 2008 the Financial Crisis hit the world. The printing industry was already suffering, yet this lead to a large sudden decrease in sales; estimated between 15 and 20% (EMGE, 2010). This sudden change exposed many printers to the issues currently harming their market. Desperate to keep their presses rolling, many started to decrease their prices. A three hundred thousand euro press working against cost price costs less then one not being used. Offering printing against cost price partially destroyed the price benchmark of printing. The reasons why many printers started lowering their prices is related to the fact that they found it difficult to define themselves within this market in any other way (Webb, 2010).

6.2.6 ConclusionThe technological mind-set and related approach, is the most important reason for the increasing commoditization of this market. Through the years the printers have stopped adding value. In its basic form the product and service of printers hasn’t changed over the last decade(s). Many of the printers have not sufficiently grown with the total development of the communication industry, instead they almost boycotted the entire change in the market. Viewing the internet as the enemy of print.

“We used to buy the biggest, the longest, the fastest, the most powerful printing press we could get our hands on, and that would be our set-up for the following ten to fifteen years.”

Robbert Bosch, CEO Royal Printer Callenbach

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6.3 The Commercial Printers

Treacy and Wiersema (1995) defined three fundamentally different types of business disciplines; Customer Intimacy, Operational Excellence and Product Leadership. Allthough companies must pursue all these disciplines in order to be succesful; the main focus usually lies with one. The Customer Intimacy discipline focuses on adding value through building on the customers specific needs and demands. This usually leads to the creation of value added services and high customer relationship management. Operational Excellence on the other hand focuses on streamlining the operations of the company to reduce costs and improve profit margins. Product Leadership focuses on the creation of innovative and premium products.

Commercial Printers are mainly focusing on two different directions; operational excelence and customer intimacy. This leads to two main types of printers, respectively; Capacity Focused Print Providers and Service Focused Print Providers.

6.3.1 Capacity Focused Print ProvidersThrough the constant streamlining of their printing process Capacity Printers are able to offer print work against lower prices. It is an intense market; in order to keep profits coming in, the presses need to be rolling all day. It is focused on bulk (quantity). This market is ruled by medium to large sized printers; companies with the resources to be a capacity printer.

Due to the trouble within the commercial printing market (see paragraph 6.2), many commercial printers have been enticed down this path. The last couple of years even smaller printers have started to enter this market, just to keep their presses rolling. This field of printing has become an (online)

price war, in which simple standard print jobs (e.g. flyers, business cards, folders) are offered against minimal prices. Many printers have been unable to survive in this competitive market. But by now, even the price benchmarks for capacity printers have been broken down.

The focus within this market is on operational excellence. Yet, due to the lower price benchmark and demand, this does not necessarily mean that it gets your company more print work; unless you are incredibly succesful at it and are able to reduce your prices severely. Reimann, Schilke, et al., (2010) found that Operational Excellence and Product Leadership are becoming of less value once a market is moving towards commoditization, an issue that shows in commercial printing (Ernst&Young, 2009). There is little value in focusing on operational excellence.

6.3.2 Service Focused Print ProvidersIn chapter 5 it was stated that print is becoming a luxury product. This is the field in which (Western European) printers can and some currently are distinguishing themselves; innovating on the product and service (See figure 6.6).

Service Focused Print Providers will offer: storage, graphic design, customized lay-outs, distribution, packaging and more. Some printers are even expanding into web design or E-mail marketing. Printers can basically make more profit with services than presses. Some printers are expecting it to even move further; that printing companies will eventually become marketing service providers which offer a broad line of marketing products (from E-mail marketing to social media marketing). In this scenario it is expected that print will be sold below cost price and that profits will be generated by the additional services (Webb, 2010).

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Though becoming a marketing service provider sounds like an interesting venture, building services is a difficult task for the commercial printer, as paragraph 6.2 elaborated on; otherwise the product would not have so easily turned into a commodity. Some printer are calling themselves marketing service providers, yet most are failing; they are viewed as production companies, which have little knowledge on marketing services. Simply changing your name does not change your image.The main reason for this downfall of the commercial printer lies with the changing needs of their target market; the relationship with the print buyer.

6.3.3 ConclusionBased on these assumptions it becomes possible to further define the target group. The service focused commercial printers have difficulty to redefine themselves in today’s market. Though troubling for the printers, it offers opportunities for Hello to support the commercial printers with these issues. Hello is a premium paper brand and their vision is to be the answer to the needs of the commercial printers. The capacity printers focus on cost reduction; a field on which the operating companies of PaperlinX also focus. Based on these assumptions the service focused print providers will be the target group. It was already stated that Hello is focused on the European print industry and that small to mid-sized companies are their main target group. So far the commercial printer has been viewed as the target group; yet a commercial printer represents an entire company. To define the target group the definition in figure 6.3 (left) will be used; this will be the main focus.

In the following paragraph the relationship with the clients of the service focused printers will be explored; the print buyers.

Fig 6.3 Target Group Definition of Commercial Printers

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6.4 The Print Buyers6.4.1 A Changing RoleTen to fifteen years ago a print buyer would focus completely on what its job description says: buying print. The print buyer was highly knowledgable about paper and printing. In large companies with a printing budget exceeding one million Euro a year, a dedicated print buyer will save enough costs in order to be valid. The fact that the communication market has broadened has also lead to a changing role for the print buyer. Literally hundreds, even thousands of print buyers lost their job (Dana, 2010). Budgets are spread across a broad range of communication media, and the role of printed media in this has sunk (see chapter 5). In many occasions the responsibilities of the classic print buyer have been absorbed by the marketing manager, communication manager or publishing manager (O’Brien, 2010). This blurs the role of print buying. Two main groups of print buyers can be defined; Creative Agencies and Corporate Buyers.

Creative agencies are a large group, and increasingly becoming more important in their role as print buyers. Creative agencies can be companies from 1 to well over a 100 employees; yet in most situations there’s only one print buyer (e.g. the desktop publisher or communication manager). For corporations with an internal marketing or communication department the buying of print is usually done by the communication manager. Yet, let’s not forget that many small businesses also buy print (brochures, flyers and folders). Though these companies usually hire an external creative agency for this work, there are occasions when they will organize it themselves.

Fig 6.4 Graphic Designer Els Teunissen

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new print buyers can in some scenarios almost be viewed as common consumers. Commercial printers are currently not adapting their business to this.

The main conclusion that can be drawn from this paragraph is the fact that there is a gap between the commercial printers and print buyers; on a social and professional level. In paragraph 6.5 this gap will be further explored through an analysis of a typical printing job process, and the relationship with the print buyer in that process. In paragraph 6.6 this will be outlined through three main reasons, leading to three search fields and opportunities for Hello.

6.5 Print Job CycleTo further explore this gap, and the tangible issues it brings with it, the process of a print job was analyzed. On the following page is the printing cycle of a typical printing job (Figure 6.5).The model is based on the Service Focused Print Providers as was discussed in the paragraph 6.3. These printers will involve themselves in projects and aim to help their clients with all the steps through the process, since it will often be a demanding print job (imagine for example a children’s pop-up book, a high quality magazine or a number of varying products part of one single marketing campaign).

The cycle is based on interviews with printers, print buyers and the experiences within the TAN Brand Communications office.

Please view figure 6.5 for an understanding of a typical printing cycle.

6.4.2 Relationship with the PrinterThe diffusion of the role of print buyers is hard to handle. In the old situation the print buyer would be on the same level as the printer. It was a technological, organizational and financial role which matches the mind set of the printer (O’Brien, 2010). Today in many situations the print buyer has a creative, communication or marketing background. the services and approach they expect or would like to see are different from those of the classic print buyer.

The main difference between the classic print buyer and today’s print buyer is the fact that they are increasingly becoming more driven by emotion. There’s a mismatch with the commercial printer. Due to this increasing lack of technological knowledge print buyers make a decision based on price and gut feeling (Webb, 2010). Yet, this is difficult to grasp for the technologically focused printer.

6.4.3 ConclusionIn the current commercial print industry, the print buyers primary need is focused on price. Due to the low differentiation between printers it is the only clearly recognizable issue that distinguishes one printer from the other; it can come down to literally tens of euros on a a twelve thousand euro print job (taken from interview). A research with print buyers has also indicated that an increase in the service level of printers, and additional services will be appreciated (Ernst&Young, 2009), but are simply not offered to the level and needs of today’s print buyer.

Todays print buyer has different and broader needs than before and commercial printers need to transform their services to fit these needs. Basically, many of today’s print buyers aren’t as educated in print as they used to be. These

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PrintJob

C

q? PC

ProofPrintJob

qC

Final

Des

ign

C

FinalPrintJob

FinalPrintJob

FinalPrintJob

FinalPrintJob

C

FinalPro-duct

Fig 6.5 The Print Job Cycle of a typical print project

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6.5.1 Touch PointsDuring this cycle there are many touch points between the commercial printers and the print buyer. In Table 6.1 is an overview of a number of these for a typical printer (see appendix 12 for more background information). To relate this to the previously explored social and professional gap between commercial printers and print buyers, three of these will be briefly discussed. This will provide the reader with an understanding of the issues.

In the ideation (chapter 8) each of the touch points and steps in the print cycle will be further explored, to find opportunities for Hello.

WebsiteResearch studies show that over 48% of print buyers always checks the website of a printer before starting a new job, 45% does this frequently or sometimes and only 7% never does this (Dana, 2010). In Figure 6.6 and Figure 6.7 are two examples of websites from commercial printers. Moo is an example of a successful printer which has adapted its business

to the market. Drukdrukdrukker is an example of a typical printer; not an exception, but sooner the rule in this industry. Commercial printer Moo has created an approach, focused completely on their target group; creative professionals. For Druk Druk Drukker the main target group is the same, yet the approach is completely different. First of all, the obvious difference lies in the design of the website. Though a subjective topic, most of us will value Moo.com above Drukdrukdrukker.

More interestingly is the practical way they approach their clients. On a technological level both commercial printers would be able to offer the same products (see paragraph 6.2.2). Yet, the difference with commercial printer Moo is the fact that they have applied their product to the needs and wishes of the target group. Druk Druk Drukker would also be able to print a different image on each business card, yet they have not translated this opportunity towards the client. Moo was simply created with today’s print buyer in mind. Druk druk drukker was created from the own view of the commercial printer.

Table 6.1 A number of the touch points between the typical commercial printer and the print buyer.

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Fig 6.7 Druk-druk-drukker.nl an average Dutch printer offering its services online

Commercial Printer Druk Druk Drukker is one of the top ten search results in google when looking for “Drukkerij” (Commercial Printer in Dutch); most of the existing websites of other commercial printers have a similar online approach.

Druk Druk Drukker offers an incredible variety of products; from business cards,to flags, to books in all sizes, and the list goes on. This commercial printer focuses on price; yet their prices do not differ from the competitors.

The website is difficult to use, and the amount of products which one can select from make ik difficult to select. The website was obviously designed from the view of the printer, not aimed at the view of his clients.

Fig 6.6 Moo.com a commercial printer focused at business cards, postcards and stickers

started in 2004 in the United Kingdom. Their business focused completely on the printing of Business Cards. What made their product special was the fact that on the back of each business card a different image could be printed. Technologically not a difficult process, yet a simple innovation which spoke to the market.

Recently Moo.com opened an office in the united states. Their sales reach all over the world, with four main products; normal business cards, small business cards, postcards and stickers. Moo.com is mainly used by people from a creative profession, to whom this approach has proven very attractive.

*To get an understanding of this issue, please take a look around on these websites online.

http://www.moo.com

http://www.drukdrukdrukker.nl

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MarketingDue to the current market conditions many clients easily switch between printers, making the Pre-Print Process touch points incredibly important. Yet, research and market expert opinions shows that too few printers pay attention to this area (Dana, 2010). Promotion and marketing are below standard; especially if you realise that their clients are mostly working in the communication, marketing and graphic design (Webb, 2010). First of all, too few commercial printers do active marketing. As the previous paragraph showed, many websites are years behind in design. The same is true for the marketing touch points. Flyers and brochures are outdated and social media is out of the question. In various situations a flyer or the website will be the very first touch point with the commercial printer's business; this can not lack in quality.

PrintingAfter the entire project is discussed between commercial printer and print buyer, and the project is signed off, the actual printing and processing will commence. Though, currently actually not a touch point in the eyes of the commercial printer, it can often be a troubling time for the print buyer. Due to the lack of transparency during this time, print buyers are often unsure what is happening in the process. If any delay

occurs during the printing, this can be of great importance to the print buyer. For commercial printers this would be an excelent point in the process to show the value which they are adding to the project, yet no such thing occurs.

6.6 The Gap

The print industry has, similar to the paper industry, become a commodity market. This can be explained through a number of reasons; the drop in overall printing sales, the technological focused mind set of the commercial printers and the continuously changing role of their clients; the print buyers. Commercial printers don’t speak the language of the the print buyers, which makes it difficult for print buyers to distinguish between commercial printers. The main way print buyers currently differentiate between commercial printers is on price.

6.6.1 Why did it come this far?One may wonder why this has happened. There are numerous resources available to the commercial printers; industry magazines, industry associations, suppliers and more. Yet, there are very little resources directly available that tackle these specific issues (see Appendix 10 for an exploration of

“...Print Associations have certainly done their part in failing their own industry by turning a blind eye to media and communication trends— Certain associations have done very little but defend printing—that is, defend the status quo from encroaching new media and now no one knows the value of print anymore.”

Joe Webb, Disrupting the Future

“I have a big job coming up. I’m probably working with the new printing company and we’re thinking about using digital printing...But, this last bad experience, with him and digital printing, puts me on edge... on all levels. Once I hand in the files, I have to trust him. I can never be sure until I actually receive the work.”

Els Teunissen, Graphic Designer

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6.7 Search Fields

Based on the analysis in this chapter three main opportunities can be defined to improve the role of the commercial printers within the communication industry. In the Ideation phase of this project the following three search fields will be used as a starting point for the generation of ideas.

The Commercial Printer should adjust their services in order to make the process more transparent to their own advantage.

Currently there is a need for translatation between commercial printers and print buyers. �ey simply are not speaking the same language, and printers are missing out because of it. �e communication channels (or touch points) of the commercial printers whether it is; the website, the personal contact or the E-mail contact, is not up to the standards of the print buyer. Each of these is initiated from the view of the commercial printer, not from the view of what the print buyer would like to see.

Sea

rch

Fiel

d 1. Improve theTransparency of the Process

2. Instigate a Pro-Active approach towards the Print Buyer

3. Create Print Buyer centered touch points

Today’s print buyer do not share that mind set of the commercial printer; they are creative and driven by emotion. �ere is little interest in printing for print buyers, focus lies with the end result. Commercial printers realize this and therefore focus on the end result, by taking as much out of the hands of the print buyers. �ough this improves the process for the print buyers, it also leads to the commoditization of the product. Print buyers don’t realize what a commercial printer does for them, because the process and the entire market is highly nontransparent. Furthermore, commercial printers have not added value which is noticed by the print buyer.

The Commercial Printer should be more pro-active in their approach to the market. They must take the lead in projects, actively approach clients and create a new name for their company.

Commercial printers still do business based on principles from when the printed product was still going strong. In those days print buyers would find commercial printers, relationships were longlasting and service was just as important as price. Today this approach is no longer valid. �e Commercial Printers are still print manufacturers, working in assignment of print buyers. Yet, this wait-and-see, reactive, approach has driven the focus towards price, instead of service and quality. For commer-cial printers to become relevant in this market they will need to step away from the print manufacturer image, and focus on becoming pro-active members of the communication industry.

The Commercial Printer should design each of their touch points to the needs and wishes of the print buyers.

Sum

mar

yG

oal

these resources). Whattheythink.com is an American website aimed at commercial printers. Joe Webb, one of the managers at whattheythink.com, released an e-Book (Webb, 2010) past september which’ following quote sums up the problem perfectly (see quote on page 35).

The Commercial Printers were never stimulated by their associations or industry resources to re-invent their business. The associations focused on keeping Print alive, while they should have focused on keeping the Printers alive (see page 44 for an example).

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6.8 Conclusion

6.8.1 Change in the MarketThe change in the commercial printing market has proven to be a chain reaction of several factors. The demand for commercial printing decreased due to increased competition from other mediums. The commercial printers had difficulty in handling this. Suddenly the offer was greater than the demand. Commercial printers needed to distinguish themselves and approached this they way they were used to; innovate based on technology. Yet, the technology is advanced these days, and the differences between most commercial printers in technology are marginal.

The clients of the commercial printers, the print buyers, were at the same time also changing in role. Due to the decrease in demand for print, many professional print buyers lost their job. The task got increasingly taken over by the communication manager, the marketing manager or the publishing manager. For this new print buyer, buying print is just one of their many duties; certainly not at the top of the list.

Based on these new print buyers, combined with the technological commoditization and decrease in demand, commercial printers had to distinguish themselves in new and innovative ways. A difficult issue. Many commercial printers had difficulty in coping with the change and they started focusing on price. Yet, distinguishing in price is war within this market.

6.8.2 The Search FieldsThese insights lead to an analysis of the printing process, to find out whether commercial printers could improve their

business in other fields instead of price. The analysis of the Print Job Cycle showed a number of issues, and opportunities for the commercial printer to improve their business. Based on this analysis three search fields were defined to create new concepts for the commercial printers: improve the transparency of the process, instigate a pro-active approach towards the print buyers and create print-buyer centered touch point.

A number of functional design directions was also already recognized in this process, these are the areas in which the business of the commercial printer could be improved. Examples of these are: the website, the marketing, the printing production process, and more. These were briefly discussed in this chapter (see paragraph 6.5.1), yet they will be further explored in the idea generation. They will lead to a several concepts (see Chapter 8).

With this the groundwork for the new concepts for Hello has been laid. In chapter 8 this will be further discussed.

6.8.3 TrendsThe generation of concepts will be driven by the search fields and, the analysis of the print job cycle and the related touch points. Yet, throughout this chapter a number of trends has been discussed, yet without clearly defining it as a trend. To clarify the trends which are of influence of this project, please view appendix 9 for an insight. The main trend which will be taken into account is the focus on online business for commercial printers; online communication, online sales, and more.

“...they are not proactive towards us. It’s a traditional industry and they wait to be asked.”

Daniele Sala, Communications Manager of B & B Italia

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7.1 Communication Platform

An online communication platform defines itself as: “A meeting place for people on the Internet. Designed to facilitate interaction and collaboration among people who share common interests and needs.” To most people the basic Discussion Forum will come to mind. Today’s communication platforms often offer much more. From platforms which allow people to co-create online, online sales platforms, platforms for product research, platforms for live customer support, and more. A platform is often an integrated system of many functions like: blogs, industry news, white papers, videos, a classic forum, real life events and of course all integrated with social media like twitter, facebook, linkedin or myspace.

Allmost all existing companies have a website. This website is often used as an online brochure, focused on push marketing; promoting the benefits of the products. Yet, when a consumer wants information on a new television, they do not go to the Sony or Panasonic websites. More often then not, they will go to a website like CNET.com, which compares televisions

In chapter 4 it was concluded that an online communication platform would be a valid possibility for Hello to approach their prospective clients. In the research described in Chapters 6 it was found that their is a gap in understanding between commercial printers and print buyers. To make commercial printers aware of this an online communiction platform is a relevant idea. In this chapter the possibilities of this will be further explored.

Communities

and offers independent reviews by users. Enticed by the luring success of online communication platforms, most companies feel the need to take action. As Bernoff & Li (2008) mention: “Companies know they have to be there, they just do not know why.” Online communication platforms are simply a great and relatively inexpensive way to reach a large number of people, if you know why.

In the internal analysis it was concluded that Hello should be less dependent on the operating companies for the delivery of services. Yet, without the operating companies Hello has little reach; they miss their regional distribution channels. An online communication platform could provide Hello with the proper medium to reach their clients, while minimizing the necessary resources and financial investments (Anderson 2006, Porter 2008). In fact, the opportunities spotted in Chapter 6 provide a proper reason to use this approach.

Based on these insights communication platforms are explored in this chapter. The focus will be on the proper method to create a platform, to explore the possibilities it

CH. 7

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could offer Hello (for profit) and learn from a number of case studies. This chapter will not discuss the technologies (e.g. Twitter, Youtube), due to the fact that these are subject to constant change and the initial strategy to move online will be independent from the technology to be used.

7.2 A CommunityA communication platform is dependent on the amount of visitors it receives. The communication platform could be deemed the software or the technology, whilst the group of visitors or users is called the community. As Porter (2008) describes “When you support an activity, when you make people better at that activity, by either supporting them directly or helping them support each other, then you gain the opportunity for that group of people to call themselves a community”. Being the company behind this community offers great benefits and power (Bernoff & Li, 2008).

Most of today’s successful communities started out as a simple online blog or news website and in a process of one to several years they grew into large groups of people. And this

is exactly where the value lies of communities. A community is defined by its number of active users; users which actively read, participate in discussions and add content (Bernoff & Li, 2008). Whether a community is used for support, marketing or innovation, it can only become valuable in those areas once there are enough members. Yet, communities do not sprout up by coincidence. People will need a strong incentive in order to become a user of a communication platform.

7.2.1 Community ObjectivesWu (2009) acknowledges three main objectives for communities: support, marketing and innovation. Three separate goals, yet in practice they will be overlapping and pursued all three. A support community offers knowledge. Dell has a large online community which support each

Don’t let the name fool you. Beernet is a website focused on exclusive news for the american beer industry. Every week a news letter (the Beer Business Daily) is send out and articles are posted on the website. For this simple offer its members pay $499 for a one year membership. Furthermore they offer special research report starting at $499 per report.

Beernet started as a simple blog, yet within 9 years it grew to a highly profitable business with revenues rating over a million. It is estimated that out of a targeted 3000 possible users in this industry, over 2000 are a member of the Beer Business Daily. The name and the design might confuse you due to its simplicity and humour; but this is exactly what speaks to the people in this industry. It is finetuned to the needs of the target group.

Fig 7.1 The Beer Business Daily, an online industry news platform aimed at upper management in the beer industry

http://www.beernet.com

“Any plan to monetize content must start with first attracting faithful users by constantly providing a stream of attractive, relevant and timely, targeted values, and to then convert this attention into money.”

Gerd Leonhard (2010)

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other with technological and software problems. Marketing communities are aimed at improving the brand awareness and equity of companies. Starbucks has a community through which people simply discuss the brand and products. The last is innovation. Usually the community exists of motivated users of a company’s products. They possess a wealth of information for the company, which the company can tap into to improve their products. Rowland (2009) found that the main reason for B2B users to use a community is support; or, a knowledge community.

For Hello to build a community they will need to create great value for their target group. Galliford (2010) argues that there are three main functionalities of content in order to make it valuable for its target group: the level of exclusivity, the amount of time it saves and the amount of risk it reduces. In chapter six an opportunity was spotted to help commercial printers with their business activities; this can consist of knowledge content (e.g. information) or even specialized services. Within this area Hello has the opportunity to offer content which is not yet available (see paragraph 6.6.1). An interesting concept, yet it leads to a number of issues: Is the Hello brand strong enough to carry this communication platform?

and; What business model can be applied to make it profitable?

7.3 Independent or BrandedIf Hello was to pursue an online communication platform aimed at commercial printers, this will most likely be branded under the Hello name. The issue with branded communities is the relation between wanted and unwanted interference from the Brand, which in the end all depends on the expectations of its users (Bernoff & Li, 2008). Re-calling the statement from Porter (2008) at the start of paragraph 7.2; communities can only exist if everything is aimed at the needs of its users.

For Hello and their customers the goals differ, which is the case in most situations (Razorfish, 2010). As a brand Hello might want to talk mainly about paper, yet the research has proven that the commercial printers do not. Research has shown the main, untouched, need of commercial printers (see chapter 6). Hello has the opportunity to support the commercial printer in their process to adapt their business to the new print buyers. Yet, if Hello would subsequently use the community to market their paper products, this might

Dell Ideastorm is a platform for research and innovation for Dell. Users of Dell computers can post product and service ideas and from time to time Dell organizes a special Storm Sessions. An online brain storm in which Dell offers the users a dilemma or a new innovation to discuss and brainstorm on. Dell validates each idea and let’s the author know what will happen to it. Currently out of the 14,867 posted ideas, Dell has implemented 425 of them.

The platform is build on the altruism of its users. The users can vote on each others ideas and they get (online) recognition for this. There is no financial or other tangible benefits involved for the users.

Sadly for Dell the platform is decreasing in popularity, its last storm session reading: “What can Dell do to make IdeaStorm better?”

http://www.ideastorm.com/

Fig 7.2 Dell Idea Storm, a research and innovation platform aimed at Dell’s core users

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affect the growth of the community. This is a delicate issue, which should be approached with care. Hello will need to approach it properly and this will not be an easy process. Hello currently focuses exclusively on marketing; and the commercial printers know this.

7.4 Online business modelsPart of Hello’s aim with a new service was that it would earn profits. In 2009 the market for paid online content in the united states was estimated at 15 billion dollar (Galliford, 2010). This number shows the opportunity in this market, yet many companies still fail to pursue it successfully. It demands a change in mind-set to build a business model around online content. The trouble with making money on online content remains the fact that it’s often plagued by free copy or free substitutes. The news paper industry is probably the best example of this change.

As Miles Galliford (2010) notes, people are not eager to pay

for online content. Worth will first need to be proven, before people will be willing to pay for it, or for additional content. Online consumers are not used to paying anymore (Anderson, 2009). Services like Google or Skype are free to its users. Online business makes this possible. Once the content (e.g. information, software) is produced, distribution and sales costs are close to zero. Anderson (2009) recognizes three online profitable business models:

Direct Cross-SubsidiesIn one of the most familair business models free products (e.g. a community) are cross subsidized by paid products, software, services or knowledge. The following examples all have a community (see Appendix 11); Threadless sells T-shirts (products), MarketingProfs sells research articles (knowledge), TED sells conferences (networking) and Ebay sells online auctions (listings). All of these companies have a large online communication platform, yet they generate the revenue to support this community from cross subsidized sales.

Stompernet is a platform aimed at internet marketing. The platform has an enormous collection of articles, tutorials and videos on the topic, a collection of downloadable applications to aid with the management of online marketing (e.g. to meassure website statistics, etc) and stompernet organizes special live events and video conferences. Furthermore, it includes an active community of over 250.000 members which can help each other out. Memberships run up to 200 $ a month plus extra costs for special features, services and applications.

Stompernet started with articles and the possibility to ask questions to stompernet’s experts. The platform was able to extend its portfolio in a number of directions over time, now a successful multi-million dollar online business.

http://www.stompernet.com/

Fig 7.3 Stompernet, a platform aimed at businesses in need of internet marketing knowledge and advice

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Three Party MarketAdvertisements and sponsorship fall in this category. Users obtain products, services, software or knowledge for free, due to the third party which subsidizes them. Existing platforms in this market, for example whattheythink.com (Appendix 11), partially exist due to a large number of sponsors; in most cases large printing press manufacturers (e.g. Xerox) or paper merchants (e.g. Sappi).

FreemiumFreemium is a model which fits between the previous two. In the freemium model a fraction of the users subsidizes the free users. Ebay or Flickr are well known examples of these; a number of users pays (for a premium membership) to obtain a number of extra services.

For Hello three party markets are most likely not a possibility. Advertisements or sponsorships of a branded community is considered unlikely (Nicholson, 2009). A branded community with advertisements from other products seems questionable. Depending on the development of the community, opportunities might present themselves in the future to focus on sponsorship. During the start of the community Hello should focus on creating value for themselves; the cross subsidies and freemium business models

provide opportunities in this area.

It should also not be forgotten that profits can be generated in areas other than financial benefits. Communication platforms can offer businesses opportunities to do research and acquire knowledge from their clients. This can subsequently lead to innovation and revenue.

7.5 PartnershipSo far it has been assumed that Hello could create a communication platform of their own, yet they could also invest in an existing platform or create a partnership with another brand (to spread the cost). Within the Wood Free Coated paper market, Hello is the number one brand. Yet, when one would view the entire printing industry, and all its related stakeholders, Hello has strong brand competitors. As the internal analysis showed, Hello is currently behind the operating company’s brand in importance. Working together with external stakeholders, for example printing press manufacturers or existing content platforms (e.g. whattheythink.com, printweek), brings a great risk of being overshadowed by that stakeholder. Hello’s intentions could suffer the same consequences as those within the structure of PaperlinX.

7.6 ConclusionThe main conclusion which can be drawn is the fact that it will not be an easy process to create proper communication platform to support and stimulate the growth of a community. It could offer Hello a great platform to manage its own direct channel with its clients. But, people in general are sceptical towards paying for online services. The case studies prove that

“The time-honoured approach — “if you want this content you’ll have to pay, first” — is collapsing and won’t come back. The new paradigm is: “It seems like you like my content. Here are a few options to have an even better experience.”

Miles Galliford (2010)

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valuable content. Yet, once the ball gets rolling, it will start to take on a growing life of its own.

7.6.3 Use & ContentBranded communities in the business-to-business field are focused on support or, research and innovation for the company. Yet, the commercial printers do not need support for their paper needs and Hello currently does not pursue extensive product innovations which would benefit from a community. Innovation through the community to extend the brand in new categories could by very valuable.

7.6.4 RevenueOnce an online community of faithful user is created Hello can start focusing on generating profits through the communication platform. The most often used and least demanding business models, sponsorship and advertising (e.g. Three Party Model), are out of Hello’s reach. This means Hello will have to focus on the sales of content, whether it is knowledge, products, services, applications or events, in order to gain revenue through a platform. The research in chapter 6 and the case studies show there are plenty of possibilities.

there many possibilities, it is a matter of what Hello will be able to offer its clients.

7.6.1 BrandingHello has the opportunity to create a proper communication platform. Based on this analysis the communication platform should be initiated under the Hello brand. This will allow them, as one of the first paper brands, to create their own communication channels with their clients; without interference from internal (e.g. operating companies) or external (i.e. an external partner) stakeholders. Hello has the vision and brand identity (chapter 2), the answer, to build on. They can and should use this benefit.

7.6.2 Growth comes firstThe value of a communication platform lies in the number of its visitors or users, the community. Hello would have to first focus completely on growth. The commercial printers will not easily be convinced towards a Hello branded communication platform and Hello will have to prove its worth. Hello has stated that they would prefer a profitable platform, but this simply is not possible during the first phases of its existence. It takes time and effort to start and grow a community (figure 7.4). This is one of main reasons many communities never take off; it usually demands more time and effort than expected.

Increasing activity is an iterative cycle of many factors which each affect one another. Creating more content will lead to more visitors. More visitors will lead to more community members. More community members will lead to more discussion. More discussion will lead to more content. And so on. To get people towards the community, and to get them actively involved, the community should offer foremost

Fig 7.4 Starting a community takes time and resources

Time/ Value Added by Iniatior (Hello)

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This poster is part of a European campaign to promote the Power of Printed communications. Research

has proven that printed communications are still one of the most persuasive types of communication.

Institutions and printer associations are often focused on keeping print alive; whilst they should have focused on keeping the printer alive. There is no use to promoting the old paradigms around print, because these no longer exist in todays society. Television, the internet and social media reign. Printing is not dead, it just needs to adjust its position within the market, to match needs and wishes from todays print buyers.

One may wonder whether a poster like this will persuade people working in marketing, advertising or related fields to actually focus more on printed communications.

I

AM

VERYPERSUASIVE

ALLY

A

I am the power of print. By adding print to TV and online, brand awareness and consumer purchase intention is increased by 50%. Learn more about print media at printpower.eu.

To order the brochure, download the reader at www.upcode.fi on your mobile and scan the code using this reader.

Add print, add power

ALLY.indd 1 30/10/2010 11:35:27

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ConceptualizationSection 3

An exploration of commercial printing exposed that the industry was suffering under the existing market conditions. Printing had been driven towards becoming a commodity. After pealing away a number of layers it was discovered that the covering issue was a gap between the commercial printers and their clients (i.e. The print buyers); on a professional and social level. An analysis of the printing process and the relationship between the commercial printers and their clients lead to the creation of three search fields to improve the position of the commercial printer. These are: improve the transparency of the printing process, instigate a pro-active approach towards the print buyers and create print buyer centered communication (e.g. Touch points).

Within these three search fields a number of opportunities was already recognized throughout the project. Yet, in the following section this will be further explored. Based on the search fields and the analysis of the printing process an idea generation phase initiated. The process and the selected concepts will be discussed in this section. The section will end with an analysis of the selected concepts and the conceptual creation of the new strategy for Hello.

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CH. 8

IdeationThe initial research in the first two sections of the report lead to a number of opportunities for Hello. The conclusions from these studies were taken as a starting point for the generation of concepts. During the this phase a number of creative techniques were used, covering brain storms, creative sessions and discussions, In this chapter of the report a number of the most promising generated concepts are ilustrated, leading up to the selection of a final strategy for Hello.

8.1 Introduction

In the first section of this report the paper market, Hello and PaperlinX were explored. It lead to the conclusion that Hello will have to focus on the creation of concepts which could function, for the largest part, independently from the operating companies. It was concluded that Hello’s resources are currently, yet their brand and vision offered potential to use as a platform for brand extensions. Hello’s vision, to be the answer to the commercial printer’s needs, lead to the focus on the needs of the commercial printer.

Throughout this project it was expected that the opportunities may be limited, due to the size and state of the market, and therefore the scope has always been kept broad. In the second section the role of print in communication and the commercial printing market was analyzed. It was quickly discovered that the market was in trouble, yet this also offered opportunities for Hello. After further exploration the gap between the commercial printers and the print buyers was defined. This lead to the definition of three search fields.

8.2 Method

The analysis of the market and target group (see chapter 6) lead to the following three search fields:

1. Improve the transparency of the Printing Process2. Instigate a pro-active approach towards the print buyers, and;3. Create print buyer centered touch points

These three search fields were used as a starting point for the creation of the concepts. They were combined with the analysis of the printing process (the Print Job Cycle; see paragraph 6.5), to search for opportunities in the current process. Accordingly through creative sessions; mostly individually and, with fellow students and with the employees from Tan Brand Communiction Consultants, a number of ideas was created and explored. These ideas were discussed with the supervisors at Tan Brand Communication Consultants and the TU Delft, to come to a selection of concepts.

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8.3 The ConceptsOn the following two pages the most promising ideas are briefly presented. The purpose of this chapter is not to give finished concepts, but to show the possibilities that would be interesting to explore further.

For the sake of simplicity this chapter focuses on the presentation of the selected concepts. For an insight in the idea generation process, and other ideas, please refer to Appendix 13.

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8.4 A Strategy

Each of these five selected concept answers to one, or more, of the designated search fields. Yet, it became troubling to match the concepts to the Hello Brand.

8.4.1 Matching the BrandDue to the broad nature of this project, the idea generation was approached on varying levels. Hello Knowledge (Concept 3) was already acknowledged when researching the market. A more in-depth look into some of the deeper problems, exposed the other four practical and relevant concepts.

The problem with these other four concepts is the fact that they do not match to the current Hello brand, being too ambitious. If we would take the first concept as an example: Hello Update. Hello Update solves the issue that little contact exists during the printing process. Hello Update solves this with a software application, useable on mobile telephones and computers. Through the application the commercial printer can send updates to the print buyer to update them on the status of their work.

An interesting tool, yet Hello is not a software developer and the idea strays far from the current products and vision. This is problematic (see paragraph 4.4). Hello would first have to adjust their position in the market. They could work together with a software developer, preferably PaperlinX’ UplinX, but who would get the credit in that scenario? Most likely UplinX. Hello update just stands too far from the current brand and this is true with all four other ideas too. Each of the concepts would demand a transformation of the Hello brand, to re-position it in the minds of the commercial printers, in order to be implemented.

8.4.2 Hello KnowledgeThere is an exception in this, in the shape of Concept 3 Hello Knowledge. Hello Knowledge does match the current brand. If Hello were to start an online platform and start providing knowledge (e.g. articles, tutorials) to the commercial printers; they would simply start providing The Answer (Hello’s tagline). A perfect match to the brand and relevant and viable within the market. Hello would use the online platform to make commercial printers aware of the issues in their business (chapter 5 and 6) and provide them with advice on how to improve on this.

The issue with this concept is the difficulty in making profit on knowledge. The analysis in chapter 7 showed the difficulty for many (branded) communication platforms to generate profits. The examples which are able (e.g. Stompernet, Beernet), evolved over several years in order to become profitable. In short, the content of the Hello Knowledge concept would have to be very strong in order for commercial printers to start paying for it. And creating high quality content takes time and experience; for Hello to become an expert in it and for the commercial printers to accept it.

8.4.3 Concept ChoiceAfter discussion of the issues of these concepts with Tan Brand Communication Consultants and the TU Delft the following decision was made. Inspired by the example of Stompernet (see chapter 7) it was decided to create a complete strategy for Hello, with Hello Knowledge as a starting point. A strategy which will re-position the brand, to be able to endeavour in the development of software applications aimed at commercial printers. This conclusion lead to the following final concept strategy.

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8.5 The Concept Strategy

The final concept is a combination of various factors to create a single strategy. The created conceptual strategy allows for Hello to, at their pace, transform themselves from a product brand into a service brand.

The explanation of the strategy will be brief, since it will be further developed throughout the rest of the report.

Step 1: Communication Platform

The first step will be focused on the re-branding of Hello. Hello’s position will be strengthened by making it a brand which listens to their clients and provides them with content to help them develop theirselves. A brand which thinks with, not for, the commercial printer.

Hello will start with the creation of an online communication platform (Concept 3), a website, aimed at the commercial printers. Commercial printers can become a member of this platform, which will give them access to knowledge to help them with their business. Hello will provide the members with content to improve their understanding of the print buyers and the communication market, as discussed in chapter 6.

Step 2: Research on the Communication platform

Once Hello has a sufficient amount of members on the communication platform, Hello will leverage their central position in this network to gain insights into the market. Through these insights, or research, on the communication platform Hello will be able to spot opportunities for new products, services, software or applications. These will be called solutions.

Accordingly Hello can use these opportunities and turn them into actual solutions aimed at the commercial printers, to generate revenue.

Step 3: Sales on the communication platform

Once the communication platform is succesful, with a high enough member count, Hello can extend the use of it towards becoming a sales platform. Hello will, together with external companies (e.g. UplinX, Tan), develop new products, services and applications. These solutions will be sold towards the commercial printer through the platform. Hello will be able to provide the commercial printers with more than knowledge content, they will provide them with the actual tools to improve their business.

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Fig 8.1 The strategy will focus on providing a road map for Hello to becoming a service brand, to broaden their business

8.6 Model

Below (figure 8.1) is a graphical representation of this strategy. In this model the funnel can be observed as the scope of Hello.

Currently (Now) Hello is simply a paper brand, focused on the marketing and promotion of that product. In this state it is difficult to extend a brand; the vision (the answer) is not strongly supported by their actions (Sinek, 2009) and the concepts lack similarity (Ambler & Styles, 1996). The scope is narrow.

By starting with concept 3, Hello Knowledge, Hello will build a communication platform to help the commercial printers. With this platform Hello will re-position itself, creating a brand with a vision for growth. Once Hello is accepted by the commercial printers as a brand with a new vision, which understands them and actually answers to their needs, Hello’s scope will broaden.

As time, moves on and Hello develops itself, the scope will broaden, and new opportunities in categories which previously would not have matched to their brand and vision, will become possible; including the concepts discussed in this chapter.

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The StrategySection 4

The analysis in the first two section lead to a number of conclusions. In chapter six three search fields were created which, together with various other factors, were used to guide the idea generation. The ideation phase in the previous section lead to the creation of numerous ideas; of which five were selected.

Upon further exploration it became clear that the Hello brand would have to re-position itself before most of these coneepts could be implemented. This lead to the creation of a complete strategy, through which Hello will re-position itself and accordingly will start extending its brand in new categories. This strategy will be developed in this section.

Chapter 9 will cover the overall strategy. The strategy has been divided into two main phases; The implementation of the Hello Solutions Communication Platform (i.e. providing the answer) and the development and sales of products, services and applications (i.e. providing the solution). Both will be discussed in chapters 10 and 11.

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CH. 9

StrategyThe aim of this project was to transform Hello from a product brand towards becoming a service brand. Currently Hello is completely focused at its product lines of paper and a shift like this does not happen overnight. The successful implementation to become a service provider requires an integrated approach. This chapter will discuss the overal strategy; the initial foundation, an introduction to an implementation roadmap, the vision and business model.

9.1 Foundation

The market of Hello is changing; and not to their advantage. Paper sales will keep on decreasing and combined with the commoditization of the product, it will only increase the competition levels in the industry. Competitors have already been catching up to the brand. Hello has always positioned itself as the answer to the needs of the clients. Up until a number of years ago, Hello had an innovative positioning in their clients minds. Currently it is just one of the many brands available.

Roscam Abbing & van Gessel (2008) describe an opportunity in this by starting to fulfill the promises a brand makes. Currently Hello only promises to be The Answer. This core vision is only aimed at paper products, yet it provides a great platform to move it into a new category. Fullfilling the vision to be the answer to the clients needs. To be truly innovative Hello will need to thread outside of its comfort zone to create a new concept towards the industry.

From the analysis of the commercial printers it was found that the gap between them and their clients provides an opportunity for Hello. Hello will help printers adjust their touch points towards the print buyers to improve the businesses of Commercial Printers. Hello will develop tools based on the three initial design directions; improve transparancy, improve pro-activity and a print-buyer focused approach.

In here lies the opportunity for Hello. Hello can help the commercial printers to understand the print buyers and they can help to improve their marketing, website and services; to reshape the commercial printer’s touch points in order to improve their business.

Hello can provide the commercial printers with the answer (information, knowledge) and the solution (services, applications, etc) to support them in the improvement of their business.

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9.2.2 Providing the Solution (Chapter 11)Hello will become a provider of applications and services to help the Commercial Printer.

Once Hello has re-positioned itself as a brand which is knowledgable on the market, a brand that knows how to improve the commercial printer’s business, a brand with their own online community, they can use the website as a sales platform to launch new services and applications. Hello will become a provider of Solutions. The term solutions has been chosen based on the fact that the products can come in varying ways; an application to remain in contact with a client during a project, a set of tools to define the strategy of a company or a total integrated solution of service, application and product (i.e. paper).

Using this new position, Hello will start with the sales of simple applications to improve the Commercial Printer’s business. The technological development of these solutions, will be developed with smart use of partners and sister company UplinX.

This second phase of the strategy will be further explored in chapter 11. In table 9.1 is a summary.

9.2 Strategy Roadmap

9.2.1 Providing the Answer Hello will become an online provider of knowledge to help the Commercial Printer

Hello will start a website, an online communication platform. Through this platform Hello will help the commercial printer to understand the print buyer. They will offer practical information for Commercial Printers to improve their business and relationships with their clients. With this knowledge the commercial printer will be made aware of the issues that are troubling their business. On this website Hello will tackle important issues for commercial printers; how to improve the commercial printer’s website, how to improve their marketing, how to improve their knowledge on design, and more. Helping commercial printers adjust their business to today’s, and tomorrow’s, market environment. Hello will be able to apply the platform for their own benefit by using it for practical research and to start debates with the commercial printers. It provides Hello with a platform to improve their own knowledge of the market and to spot opportunities for new products and services.

This first phase of the strategy will be further explored in chapter 10.

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Table 9.1 Objectives, Audience and Method

Fig 9.1 The vision and Brand of Hello Solutions

9.3 Vision and Brand

9.3.1 VisionThis change that Hello will undergo needs to be supported internally. For this service to properly grow, and to be accepted and supported within the company, it will need a strong vision. A strong vision will show the people within PaperlinX what the plan is for Hello, and it will inspire them to support the change (Sinek, 2009). The vision is based on a methodology proposed by Sinek (2009).

Sinek argues that the most successful and innovative companies start from “why”, the core reason for a company or brand to create its services or products. Of course most companies aim to create revenue, yet this will never be a motivational vision for employees to follow. If Hello wants to grow and improve its position in the market they will need to believe in this vision; it needs to be embedded in the company’s culture before it can grow to its full potential (Roscam Abbing & van Gessel, 2008).

In Chapter 10 the necessary internal marketing activities to stimulate the succes of the communication platform will be further discussed.

9.3.2 Brand NameHello will expand its brand into a new direction. This communication platform should not be seen as a marketing platform for Hello paper. It will be a separate platform, hence the creation of a new name. The chosen name is Hello Solutions. Hello has always promised to answer to clients through their paper products. Hello Solution matches to The Answer, yet it shows that Hello will live up to their vision. The name is broad enough to both cover the initial online communication platform and it has the abillity to extend itself into a sales channel for online services and software solutions. The logo of Hello has been slightly altered to express the new vision.

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9.5 The Operating CompaniesThe analysis in section 1 of the report lead to the conclusion that Hello should innovate independently from the operating companies; or, at least they should have final control. With this strategy Hello will create this.

This does mean a change in dynamics for the first time, between Hello and the Operating Companies. Hello will need to handle this issue delicately. The operating companies might view the new strategy as an invasion of their field. Up until now all services beyond the product have been executed by the operating companies, not the paper brands. Hello will have to face it head on, before the new strategy will be implemented. The goal should be to involve the operating companies to a level that will satisfy them, yet will not make Hello lose control. Throughout the development of the strategy this role may change, depending on the direction Hello Solutions takes further in the future.

9.4 Business Model

9.4.1 InvestmentThe strategy consists of two main phases. Phase 1 (providing the answer) of the strategy will focus on the creation of a communication platform; a website which will support Hello’s clients with valuable information through which Hello will be able to have a dialogue with their clients. In phase 2 (providing the solution) of the strategy Hello will be able to distribute and sell specific applications and services through the communication platform.

Before Hello will be able to move to phase 2, they will first have to establish a successful communication platform with a steady community of commercial printers; you simply can not sell anything if nobody is there to buy it. This communication platform will demand investments in people, resources and time, before Hello can generate revenue in phase 2.

It should be noted that the communication platform will lead to indirect revenue through a number of factors. in marketing, PR and research. In chapter 10.7 these investments and benefits will be further Discussed.

9.4.2 RevenueOnce Hello will start with the sales of applications and services, (Solutions) they will be able to generate direct financial revenue. The business model of this strategy is called Cross Subsidization (Anderson, 2009) and it is shown in figure 9.2. In chapter 7 a number of different business models was explored. Based on the intent of the strategy and Hello’s experience this business model fitted best. It should be noted that untill Hello will start with phase 2, there will be no profitable business model in place; beyond indirect revenue (chapter 10.7).

Communication Platform • Community • Knowledge Content • Discussion

Hello Solutions • Applications • Services

€€€

Commercial Printer

Phase 1 Phase 2

Fig 9.2 The Business Model of Hello Solutions

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9.5.1 The communication platformTo stimulate the acceptance by the operating companies of the communication platform Hello will have to involve them positively in the platform.

Hello will offer content on the platform which is of main interest to the commercial printers. This content will in fact also be valuable to the operating companies; information they can use in their daily conversations with and sales to the commercial printers. Hello will be able to share extended information with the operating companies. Hello will instigate a separate section on the platform especially for the operating companies. This could contain information which is not interesting for the commercial printers, or it could mean advanced access to information before it is published on the communication platform.

Once the platform develops itself further, Hello will be able to cooperate with the operating companies in the organization of special events; through which both parties could benefit. Hello would be able to publish videos from the events online. There are many opportunities to cooperate with the operating companies.

It should be brought to the attention of the operating companies that the main goal of the communication platform is to support the commercial printers; it should not be viewed as sales platform for the operating companies. The operating companies can participate on the platform, yet their focus should be on helping their clients,. This will create a positive Halo effect towards their own business.

9.5.2 SolutionsThe second phase of this strategy will explore the opportunities to venture into new categories. Hello should focus that these new directions do not interfere with the business and services of the operating companies. Though chances are high that these solutions will not interfere with the operating companies, in fact Hello will meet challenges in new competitors, every new solution should be partially evaluated on their match with the operating companies.

Due to the complexity of the strategy, this topic is discussed separately. In chapter 10 the communication platform will be discussed, and this topic will be touched.

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An active online community does not sprout up and grow on its own. It demands continuous effort from Hello to create a proper communication platform for the commercial printers. In this chapter the objectives, design, content and organization amongst others for the success of the communication platform will be discussed.

10.1 Objectives10.1.1 Re-positioning HelloFrom a brand point of view Hello has pursued to be the answer to the clients need by listening to them and starting up conversations (Chapter 3). Yet, in actuality this communication has mostly been a one way street. Hello focused on marketing messages and these were not the result of the engagement in conversations with commercial printers; marketing messages do not answer to their true needs. Hello is a paper brand, nothing more, nothing less. Hello can not simply start extending its brand in new services, without first re-positioning itself. In order for Hello to re-position itself as a brand that does understand the needs of

their clients and supports them beyond paper, Hello will set up a communication platform. This platform will allow Hello to grow from a marketing focused, one-way communication, brand into a brand which has a dialogue with their clients, and provides them with answers to their problems (figure 10.1). Eventually the communication platform will make Hello the brand that even links customers to one another. Providing one of the first proper communication platforms for the European commercial printer market.

10.1.2 A Platform for ResearchThe community platform is part of a strategy to pursue growth in new categories under the Hello brand; to eventually use the communication platform as a sales platform. For Hello the communication platform will provide them with a tool to gather knowledge on possible new concepts in new categories. They will come in contact with knowledgeable people which can provide them with information and feedback.

CH. 10

Communication Platform

An online community provides a brand with a platform to easily distribute their brand message, thoughts, new ideas and new products with their specific audience. It is not only a great way of sharing, but also of obtaining knowledge. An online community can create word of mouth, which is a powerful medium. The larger the community, the larger the power one has in an industry.

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10.2 Road to SuccessFor these objectives to be reached Hello will first need to create a successful communication platform; a community. Communities, like plants, don’t just grow on their own. They demand (tremendous) effort from its initiator (Nicholson, 2009, Bernoff & Li 2008, Strauss 2009). Hello must offer value to the commercial printers in order to build a community. This expresses itself through (see chapter 7): content on the platform, design of the platform, the marketing of the platform and the network (i.e. people) on the platform (Leonhard, 2010).

Each of these topics will be discussed in the following paragraphs. The network on the platform is a difficult topic to discuss; getting the right people towards the communication platform demands for a large part on the content, design and marketing. In this report the focus will be on the organizational team behind the communication platform; the community management team.

Fig 10.1 From one way communication to a dialogue; moving towards a community

10.3 ContentEven though an online communication platform consists of various important factors to make it successful, next to proper user-focused design the single most important one remains the actual content. What content will be of value to the commercial printer which is not already widely available? (Strauss, 2009) The issue to keep in mind is the fact that in many situations the goals of the company and the customer differ (Bernoff & Li, 2008). For Hello the most obvious topic would be paper and the paper industry, yet this is not the main interest for the comercial printer (see Chapter 6).The exploration of the print industry has shown the main, untouched, need of commercial printers is knowledge on print buyers, on design, marketing and strategy; knowledge to improve their overall business in applying itself to today’s print buyer.

10.3.1 Content VisionIn the analysis sections of this report the market of paper,

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communication and print was analyzed. The overall conclusion from the analysis is the fact that there is a communicational, relational and business gap between the commercial printers and the print buyers. More importantly, many commercial printers are not aware of this; and the possible business they are missing because of it. Three main design vision opportunities were discovered (Chapter 6) in order to improve the printer’s business:

Commercial printers need to improve the Transparency between them and the Print Buyer

Commercial printers need to pursue a Pro-Active approach towards the Print Buyer

Commercial printer should design their touch point from the needs of the Print Buyer

10.3.2 Content DirectionsThese three search fields have been translated into three main directions for content; to make it tangible for both target group and initiator (Hello). The content on the communication platform will focus on: Strategy, Marketing and Design. In table 10.1 is an exploration of each of these three content directions.

An example is the website. Success in today’s market simply depends on being found, and the internet is the first place over 90% of the printer’s clients uses to find information on

Table 10.1 The content directions and examples within each direction

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Commercial Printers (Dana, 2010). It should be an integral part of the commercial printer’s strategy. Yet, many printers still use websites as a simple promotional brochure with very little actual content (Webb, 2010) and lacking any marketing value to attract the print buyers; no portfolios, no prove of quality, etc. The website is one, if not the, most important touch points beyond the personal relationships; and the design will reflect the quality of the commercial printer. Yet, more often than not the website looks like it is well over 5 years old.

Today’s website offers so much more opportunities to elevate the commercial printer’s role in the market. The website is just one of the many examples where commercial printers could increase benefit, all other touch points should be designed in order to match the demands of print buyers: Online Sales Channels, Marketing Tools, Sample work/portfolio, Packaging, Prototype design and more.

10.3.3 ConclusionThese three fields, including the given examples, are an indication of the opportunities for this platform. Currently commercial printers have few resources to turn to for information on these three topics; neither from commercial printing associations nor existing magazines and websites aimed at commercial printers (see appendix 10). Throughout the development of the platform new directions and opportunities for content will present themselves, and existing ones might disappear in due time; it is the role of Hello Solutions to apply these changes throughout the existence of the platform.

10.4 Design

The design of the platform should be aimed at the needs and wishes of the target group; the commercial printers. The objectives of the communication platform have been set. A large part of the success of the platform depends on the content. The content discussed in the previous paragraph reflects the research on the target group. The next step is to translate the needs and wishes, the personality, of the target group to the design of the platform.

10.4.1 Design VisionThe power of making a successful communication platform lies in tailoring it to your specific target group. The content has been discussed in the previous chapter, now the design of the communication platform will be discussed. For the design of the community platform three personas have been created. A persona is a fiction person, or a user archetype, that can help to make decisions about the features a system should have in order to meet users’ needs, both on a functional and visual level (Adler, 2005). The Personas can be found in Appendix 14. Based on this analysis of the target group the following design vision attributes were created.

Visually Attractive without distractingMany of the existing platform in this market use an old fashioned, news paper like, approach in its visual design. The platform should reflect the current communication market. It should be noted that a visually attractive design should not distract from the actual content, or the purpose of the platform. Form follows function is the key in the design.

Quality through SimplicityThe design should be of a simple and practical nature. This

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Public KnowledgePublic knowledge is the function through which Hello can share articles, features, interviews, case studies and webinars (online videos of seminars) on the platform. It is basically the main page of the communication platform, including a number of sub-sections, making it user friendly to navigate. Print DebateMany existing research platforms use diverse techniques for research. Print Debate was inspired by Dell’s Storm Sessions (see Chapter 7); a research (and branding) tool of Dell to discuss their products and services. Print Debate is a function through which Hello can open up focused discussions between their experts and the users of the community. Hello can use the Print Debates to gather qualitative research. This qualitative research can be used to create new services for Hello. See page 67 for a graphical representation to clarify the goal of this function.

CommunityThe community is the area on the communication platform through which users can ask their own questions or share their own thoughts; it’s a discussion forum. In this area there are no restrictions; if people prefer to discuss a printing method, or a printing press, this will be allowed. It is the area on the communication platform that will allow for direct conversation between the users.

News LetterA News Letter, though to most considered a simple and un-exciting element, it is for most companies and their communities one of the most important means of communications (Forootan, 2010). The target group may not be easily convinced towards the online communication

should demonstrate itself in the creation of an open and easily approachable communication platform of which the goal is immediately clear.

Digital intertwined with PhysicalFor most commercial printers their main source for information are the industry magazines and talking to colleagues and clients. Their industry creates physical products. The internet may in ocasions even be seen as the enemy. The platform should incorporate physical aspects.

Informal, yet professionalA personal approach is used throughout their entire business; with clients, suppliers, colleagues and consultants. Even through their existing magazines and websites. Humor is even often part of it. The overall design should radiate an informal and down-to-earth image. Yet, this should not turn to unprofessional levels.

These attributes will be used in the visual design of the communication platform. For a clear understanding on how these attributes reflect themselves, please explore the conceptual design of the platform on the following pages. It should be noted that these attributes can also be used as a guideline for the creation of content.

10.4.2 Functional DesignCombining the design vision and the objectives of the strategy lead to the design of a number of functions. These function will be roughly explained. On the following pages is a conceptual design of the communication platform, including detailed design features.

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have to be open to the public (people simply do not become members, without knowing exactly what that membership will get them). For this it has been chosen to make parts of the content of the Public Knowledge open, accessible to everyone.

10.4.3 ConclusionThese functions have been discussed seperately, yet they will be intertwined in use. Content provided by commercial printers on the Community may be picked up by an employee of Hello and turned into a Print Debate. In the end, Hello will have the opportunity to gather knowledge through all the different elements of the platform.

In Figure 10.2 is a systematical map of the communication platform. In this map the information streams are made clear between Hello – The Platform – The Commercial Printers. It also shows the connection between the different functions of the platform. On the following pages are conceptual designs of the platform to provide a tangible insight in the design; covering the main page and the Print Debate function.

platform. Providing a monthly or bi-monthly E-mail newsletter will keep them up to date. The newsletter could contain parts of the public knowledge section and the print debates; motivating the reader to become part of the discussion. Furthermore it will provide Hello with a function to do quantitative research amongst its members by integrating it in the news letter.

MembershipFor Hello to create a proper community, commercial printers will have to become members. Of course this is for free. If people become a member, they will have to provide certain contact information. This information allows Hello to create a database of its members. Next to the basic information (e.g. Name, E-mail Adress), Hello has the opportunity to discover more of its members (e.g. profession, size of company, type of (printing) company, etc); information which can be used for future research activities from Hello.

To attract people in the first place to the platform parts will

Fig 10.2 A map of the information flow on the communication platform (Stakeholders and Platform elements)

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Printable ContentThe content can be easily printed (in a magazine-like) format, for commercial printers to read exactly the way they wish.

Content FormatThe content will mostly consist of written content.Throughout the development of the platform Hello may be able to offer video content. If Hello would start with the organization of seminars these could be recorded and placed online.

MembershipMemberships allow the user access to the community, print debate and possibly extended knowledge.

Hello SolutionsIn this conceptual design Hello Solutions is a separate website from Hello Paper. This will improve the reliability from the commercial printers; this is more than marketing. It can be expected that there will be a positive Halo effect on Hello Paper through Hello Solutions (Kwon & Lennon, 2008).

Visually AttractiveHigh visual appeal, yet supporting the content. Everything should have a clear goal.

Conceptual DesignMain Page

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Print DebatesHello will focus on topics which are affecting the commercial printers on a practical and regional level; the big debates on the future of communication will not lead to useful implementable insights. The PaperlinX market research department will be able to provide relevant topics for discussion; relevant for Hello and for the commercial printers. Through the Print debates Hello will be able to explore the needs of the commercial printers and spot opportunities.

Conceptual DesignPrint Debates

Debate FormatTo provide a low barrier to join discussions, the focus is on textual communication.

Print & Social MediaDebates can be easily shared, to improve its reach and increase the number of members.

ExpertsHello will need external expertise for the organization of the platform (see paragraph 11.6). In this example a Web Designer provided his insights in a specific topic.

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10.5 Organization

In the introduction of this chapter the importance of the network was discussed. The network being the people the communication platform provides access to. This will consist out of the Organization Team and the user network. The user network are the users of the platform. Though the entire platform is aimed at Commercial printers, in an open community there is always a chance of people from other fields joining in; this all depends on how the organization team positions the platform. The Organization Team is responsible, from Hello’s side, for the organization of the entire platform; including frequency, quality and maintenance of the content, the interactive contact with the users, building a network of experts, etc. An important role which demands a proper team with the right qualifications (Bernoff & Li, 2008). The organization has been divided in two: the community management and the network of experts.

10.5.1 Community ManagementThe Hello Solutions community platform will demand a community manager to manage it. The community manager is largely responsible for the success of a communication platform. The role of the community management can be divided into two (Kloos, 2008); Community Strategist & Expert. The strategist is responsible for the successful strategic implementation of the communication platform. It covers the pursuit of community growth and constantly matching the community and its content to the vision of the company.The community expert focuses on the social side of the community; the management of the dialogues between users and brand and managing the creation of the content. The community manager will be responsible for the constant development of the communication platform. It

will demand proper knowledge on the printing industry and its stakeholders combined with knowledge on marketing, communities and social media.The community manager will have to take on an active role, highly social. It is important to realize that with this platform Hello is giving up part of its control to the users. It is not expected of this target group that they will miss-use is it; it is a quality a community manager must be able to deal with. The management of a communication platform is almost similar to the management of a restaurant. It’s a combination of content, presentation, social interaction; A complete experience. The community manager will become the personality, the face, of the communication platform.

10.5.2 Network of ExpertsThe creation of the content will have to be (partially) outsourced and Hello will need the support of experts to do this. To build the proper content the right resources have to be found; both internally and externally. Experts on specific topics. Godes & Mayzlin (2004) define these experts as Key Influencers; people with an in depth knowledge on certain topics, great communication skills and the network to reach a large group of people.

To find these people a number of models has been created, yet it is stated that in most companies it will be based on personal opinions to recognize the key influencers (Godes & Mayzlin, 2004). Verganti (2008) advises to seek people within the same field, dealing with similar problems; how have graphic designers handled this change towards online and social media, what is the view of the print buyer at a multinational or which commercial printers currently are thriving and how have they done this? Hello needs to know these people, whether they are: Sales representatives, commercial printers,

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print buyers, graphic art professors, marketing experts, bloggers or designers. Key influencers can and should be found anywhere (Godes & Mayzlin, 2004).

Internal ExpertiseThe PaperlinX Group is an enormous holding with thousands of employees. There’s a chance that a number of those employees fall in the Key Influencer category. Hello will use the PaperlinX group to find the right experts internally. This may be a highly positioned merchant manager, the CEO of PaperlinX or maybe even a new young sales representative. Bernoff & Li (2008) state that it can be people from all levels within companies. PaperlinX will need to find and cherish these people because they will have the opportunity to take an important role on the new communication platform. They may not be able to lead the community, but they are incredibly valuable in helping to build and support it.

External ExpertiseHello, and the internal experts part of the community, are just beginning within this area. Their knowledge on changes in the market, ability to do research, are available. Yet, information related to communication, marketing and web design might not be. External experts are needed to provide the community with relevant information outside of the scope of PaperlinX. The core of the PaperlinX business is based on the building of personal relationships. With these networking skills at hand it should be feasible to find a number of experts to help Hello with the creation of this communication platform.The important thing is to attract diverse people.

Depending on the expertise Hello can use these influencers in many ways. A marketing expert, with its own blog could write a number of articles. A graphic designer could

provide information on her best and worst experiences with commercial printers. A social media expert could record one of its talks on video and distribute it through the Hello platform. The possibilities are endless, dependent on the community team responsible for the organization.

10.5.3 Development of the PlatformThe development of the communication platform will be outsourced to a professional web design agency. It is of the upmost importance that the communication platform will be developed from a user point of view (Bernoff & Li, 2008); it is more than a promotional website and it will be heavily used. There are a number of companies which focus completely on the design of communication platforms (communities) and social media strategies, like Ning and Communispace. Once the communication platform is designed, the management will be done in house. PaperlinX has an extensive IT department and they will become responsible for the technical development of the platform.

ConclusionCommunities develop themselves over time. It is a constant iterative design process in which functions and content can constantly be adjusted. Hello can start small, with a basic platform. This will allow the community manager to familiarize his or herself with the management. The most important advice is simply to be alive online. Use trends and daily industry news items to guide content. If a user posts a topic, make sure there is at least one answer that same day. If there’s a special event on the industry, integrate it in the community. Engage, challenge and interact on the platform with the users. Simply make sure that not a single day goes by when nothing happens on the platform; it should always be alive.

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10.6 MarketingAs consumers we’re used to communities easily evolving on their own, even around brands; Apple, Lego, Polaroid and so on. In Business-to-Business this is different; the target market is often a specific population. This makes marketing an imperative part to stimulate success (Rowland 2009, Strauss 2009). This chapter will be divided in two section: External marketing and Internal Marketing. Internal marketing is an important factor within the structure of the PaperlinX group.

10.6.1 External MarketingUp until now the objectives, content and design of the communication platform have been explored. Based on the analysis in the first chapters of this report, it should provide Hello with a formula to build a successful platform. Whether people will keep on returning to the platform, will depend on the actual implementation. The issue which remains; why would commercial printers come to the website in the first place? Marketing plays a role in this. The objective of the external marketing is to create awareness of and interest in the communication platform.

Promotional MarketingHello has a number of existing marketing tools, or touch points, which it currently uses for the promotion of the brand. Examples of these can be found in Appendix 6. The current touch points are: advertisements in reading material, direct mail, the sample book, website, gifts and the sales representatives of the Operating Companies.

For the marketing it is essential to define Hello Solutions above the rest. Most companies within this market have started to realise the issues which are troubling them,

and most of them are approaching this Future of Print in a questioning matter through their marketing, asking: “What is the role of print in this digital world?” Hello will distinguish itself by approaching the issues which affect the daily business of commercial printers; not the big questions bothering the entire industry. Commercial printers need to be enticed by values that matter to them, making a fullfilling and challenging marketing message; making the commercial printer want to know what is available to him or her on the Hello Solutions website. The touch points are not designed, but an example is given in the figure above (the packaging of Hello paper).

Hello has been creative with their marketing in the past (Appendix 6) and in today’s market this mindset becomes more relevant.

Social MediaSocial media is mentioned under Marketing, yet it must be viewed as much more. It should be an integrated part of the community, using social media to increase the reach of the communication platform.

Hubspot (2010) found that traffic towards company websites, within B2B markets, on average increases over a 100% when the company maintains a twitter account. Accordingly the research shows that B2B users are most likely to use twitter

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and linkedin and it shows that companies maintaining active content on their website increase traffic with over 400%.

The Community Manager of Hello Solutions will become actively involved with social media. Social media is a tool to increase reach among the target group with little effort. The goal for the social media will be to share information from the communication platform (e.g. Latest Posts), to engage with others from the industry and to promote others from the industry (Bernoff & Li, 2008). Social media can only be a useful tool when one acts social (nobody will like a brand or person that only talks about themselves). More importantly, similar to the demands of the communication platform, it is of the upmost importance to be constantly “alive” online, every day of the week.

The difficulty in maintaining a social media strategy is the complete dependence on the person who manages it. This becomes a larger issue in Business-to-Business markets (Strauss, 2009); this person will need to be socially strong and knowledgeable on the paper and printing market. This person becomes the personality of the brand, not a role for just anyone.

The author is currently following a concise 80 people on twitter within the paper and printing industry; there are thousands more active commercial printers out there.

Sales RepresentativesThe most important touch point within this field remains to be the contact with the sales representatives of the local operating companies. The sales representative are in close contact with the clients through E-mail, Phone and in Person. Yet, the marketing they will do for Hello Solutions will, for

the first time, not directly benefit their own company. Internal marketing becomes a defining factor.

10.6.2 Internal MarketingThe internal marketing has always been an important topic within the PaperlinX group. Everytime a new marketing campaign for Hello is launched, a large section of the campaign is spent on promoting the brand among the sales representatives around Europe. For the upcoming Hello Paper campaign all the sales representatives will receive a flyer explaining the goal of the new campaign, a new sample book and a gift in the form of a bright red Hello computer Keyboard.

The objective of the internal marketing for the platform will be threefold;• To inform the operating companies of the new

communication platform;• To motivate operating companies to market the platform

towards commercial printers;• To find internal experts whom can contribute to the

platform.

Hello Solutions has been created with a vision to support the commercial printers (see figure 9.1). Which makes it a different situation from a new campaign for (new) paper product lines. With the communication platform Hello is not making empty promises, and this vision should be shared throughout the PaperlinX group. In order to convince the sales representatives within the company and to even get them involved, Hello Solutions will need to prove itself and share the goals for the platform with the sales representation (see chapter 9.4).

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10.7 Finances

10.7.1 Cost StructureThe cost structure of the communication platform depends on a number of different variables. The most important cost will depend on people; the management team. For the organization Hello will have to appoint a community manager (paragraph 10.5), which can be a part- or full-time function. Part of the content will most likely be created by motivated people from throughout the PaperlinX organization; attaching an exact cost estimate to this is difficult. The creation of the platform will depend on Hello’s preferences. Will they purchase an existing system or have a specific platform developed for Hello Solutions?

There are a number of variables related to the development of this platform. To provide an insight in the related costs, an estimate can be found in Appendix 17.

10.7.2 Return on InvestmentThe Return (increased revenue and reduced costs) on the Investment (time, resources and people) may seem problematic for communication platforms (Millington, 2010). For the Hello Solutions communication platform the Returns may be measured through the sales numbers of Hello paper, yet a large part of its value will be missed if this is the only measure. The most important factor therefore becomes to translate the, perceived, non-financial impacts to measurable values; financial impact (Blanchard, 2010).

The initial objective for this communication platform was not aimed at generating direct profits through sales, though there will be sales benefits noticed in Hello Paper. The focus of the communication platform was to re-position the brand

and provide a platform for research. Both of these objectives can be measured (Bernoff & Li, 2008). They can be translated into return on investment fields for the Hello Solutions Communication Platform; Brand Benefits and Research Benefits (see table 10.2).

Sales BenefitsThis strategy was created with the main goal to move the Hello brand in new categories (see chapter 9). However, this communication platform can positively influence the sales numbers of Hello paper. Even though the internal analysis (see section 1 of the report) proved the difficulty in improving sales of specific paper brands (due to the commoditization of the product), the research into the brand equity within this market showed there is a definite effect.

Brand BenefitsOne of the most important goals was to create awareness and re-positioning the brand. Based on the topic of raising awareness, the following can be measured (Bear, 2009): Amount of Community Members, Web Traffic, Web Traffic Referrals, Search Volume Trends, Social Mentions, time spent on site, repeat visits, Recommendations, printed press attention, etc. Bernoff & Li (2008) translate this into three value measures Attaching estimated financial values to each of these topics will make them measurable; advertising value, PR value and word-of-Mouth value.

This will give an insight in the success of the communication platform, and therefore the awareness it has created. There are many existing software tools to measure these numbers, for example The Online Community Research Network company offers simple packages of software and online applications which make it possible to measure the Return On Investment

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Table 10.2 Return on investment value and measurement

of communication platforms. Hello will decide on the (financial) worth of it.

Research BenefitsThe second objective for the platform was the possibility to allow quantitative and qualitative insights in the problems of the commercial printers. Hello will be able to discover new opportunities through this platform. In chapter 8 a number of opportunities within the commercial printing market are spotted, and the platform will allow Hello to test the waters for these ideas with commercial printers.

Currently the brand is dependent on external companies for most of their in-depth research. For example, in 2006/2007 Hello did a basic research in six different countries through twelve different focus groups. The research was aimed at getting feedback on a specific number of service concepts.

Research like this is a costly affair for the brand. The communication platform will allow Hello to find experts among the commercial printers, and use their intelligence in the discovery and development of new concepts.

The problem remains that a number of issues are too intangible to measure (Millington 2010). For example, the communication platform will improve the sense of unity amongst the clients of Hello, the commercial printers. Yet, what is the worth of this community. Another issue may be the improvement of the brand image. Hello can research whether the view from the commercial printers on Hello has changed, and how, yet the financial value is intangible. Hello will have to decide what the value is of the communication platform to their brand.

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Fig 10.3 The Roadmap towards the creation of the Hello Solutions Communication Platform

10.8 RoadmapIn figure 10.3 is a conceptual roadmap on the implementation of the Communication Platform.

10.8.1 Compiling a management teamHello will start with the compilation of a management team. Let it be stated that these roles can be part-time, and that the network of experts should be constantly expanded. Once a community manager and an initial number of team members has been appointed, the planning can commence.

10.8.2 Development of the PlatformDuring the planning phase the design of the platform will be finalized and partners for the development will be attacted. At the end of the development the platform will be tested and adjusted.

10.8.3 Platform LiveA month before the platform goes live Hello will start and internal marketing campaign to inform and motivate the employees with the PaperlinX group. Once the platform goes live an external marketing campaign will commence.

10.8.4 ResearchHello will start, in cooperation with the internal market research team, with research through the platform. Based on this research, and the analysis within this report, a number of opportunities will be selected.

10.8.5 Sales of SolutionsDepending on the research, the growth of the platform and the needs of Hello, in 2012 they will begin with the sales of solutions (e.g. services, applications, products). See chapter 11.

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10.9 Platform for Sales?The main question which remains: when is the communication platform a success and when can we move on towards the sales of solutions? This relates to three different factors; the brand image of Hello, the size of the community and the (research) foundation for new solutions (figure 10.4).

10.9.1 Image of HelloOne of the main objectives was to re-position the Hello brand in the minds of the commercial printers. Hello needed to become a pro-active brand again, innovative within their market and answering to the needs of their clients. Before Hello can start with the sales of solutions, they will need to be sure that their brand can support this task. It would be advised to research the brand image among a the target group, during the progress of the platform.

10.9.2 Activity on the PlatformIn the benefit analysis in chapter 10.7 it was stated that the success, or benefits, of the communication platform could be meassured in a number of ways; which all lead to a view on the activity on the platform. Acording to the 90-9-1 rule (Wu, 2009) a communication platform can be deemed successful

if it has 9% spectators of the total target group (visitors that view the website, yet don’t participate) and 1% active members of the total target group (visitors that actively participate on the platform). These numbers are an estimate, since they differ for each market and target group. In business-to-business these meassures could easily run up to 84-12-4 (Wu, 2009).Using the 90-9-1 rule as a meassurement, and based on the target group, it could be stated that the community must have 300 active members (0,3% of the target group) and 2000 different monthly spectators (2% of the target group). This would provide Hello with a sufficient platform to start with the sales of solutions.

10.9.3 Opportunity RecognitionIn order for Hello to be able to develop solutions, they will need to have sufficient (research) foundation. Hello will need to plan the research carefully, in order to anticipate on the development of new products. In the analysis of the market a number of opportunities was recognized, which could be used for further exploration. Once Hello has a sufficient foundation, they can take the next step and start with the development and marketin introduction of new solutions.

Mem

bers

Time

Fig 10.4 The three values to decide whether to start with the second phase: the Sales of Solutions through the Platform

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CH. 11

SolutionsAt this point in the timeline Hello has re-positioned its brand, and the communication platform has a sufficient amount of activity. Through this platform Hello will be able to spot new opportunities in the commercial printing market and they are able to research new application and service ideas. In this chapter this process will be further explained and a number of conceptual ideas will be provided as an inspiring starting point for the further development of the strategy.

11.1 ObjectivesIn the first phase strategy, the focus was with the re-positioning of Hello, creating awareness through becoming a knowledge provider and researching the commercial printing market. Hello will enter the second phase, providing the solution, when the communication platform has become a success. In this second phase the focus will be on the development and sales of the solutions.

11.1.1 SalesIn the first phase of the strategy, providing the anwser (Chapter 11), Hello created an environment for themselves in which they could spot and identify business opportunities. In this second phase of the strategy, Hello will develop and sell Solutions for these spotted business opportunities. The term solution is used, because the opportunities may be of different types: a service, an application or an integrated solution combining product, service and software.Depending on the shape of the solution, Hello can partner with sister company UplinX or specialized external parties. Together they will

develop potentially succesful solutions to be offered, sold and distributed through Hello’s own online platform Hello Solutions.

What kind of solutions could Hello offer the commercial printers through their platform? To be able to give Hello an understanding of what they should aim for at this stage, a couple of already identified business opportunities are materialized in this chapter. These concept function as example solutions and Hello is encouraged to develop their own concepts when they enter this phase.

Therefore, to give Hello a more tangible insight in the goal of this strategy, three of these concepts will be materialized in this chapter.

11.2 The ConceptsThe reversed funnel model in figure 11.1 shows the development of Hello Solutions throughout its existence. In 2011 Hello will introduce the Hello Solutions

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Fig 11.1 Throughout the development of Hello Solutions the brand will be able to endeavour in new product categories

communication platform. As the communication platform becomes more succesful (chapter 10.9) Hello can start with sales to generate profts. At the beginning of its existence the new solutions will stand close to the Hello Communication Platform; helping the commercial printers understand their clients. Focused on creating awareness. As the commercial printers become more knowledgeable on the market, the focus for the Hello Communication platform will change from a guiding role, into a supporting role.

In a supportive role Hello will start offering more in-depth solutions in order for commercial printers to become more transparent, pro-active and print buyer focused in their business (based on the search fields: see Chapter 7). As the platform and the commercial printers develop further, the solutions will become more in-depth integrated solutions: the

funnel will become broader. The furter in the future, the more elaborated the concepts can become (Hence, the reversed funnel model).

The objective of this strategy is for Hello to start actively researching the market and innovating on the opportunities they will spot. Therefore, to give Hello an insight in this development, three exemplifary concepts are created: Hello Printer Improvement, Hello Update and Hello Print Store (see figure 11.1). These concepts are located in varying places of the reversed funnel model, ranging from close to the core to far in the future.

On the following pages these three concepts are described. In the paragraphs after this more information is offered on the development of the portfolio.

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11.3 Hello Printer Improvement 11.3.1 FoundationThe first concept, the concept closest to the core, builds on the knowledge content of the Communication Platform. The communication platform is aimed at providing knowledge to and sharing knowledge with the Commercial printers. As Hello continuously refines the content and the communication platform, their own expertise will also continuously improve. An approach used by many similar platforms (see chapter 7) is to start generating profits through the knowledge that is offered. If the content is exclusive and valuable towards the commercial printers, it is an opportunity to profit from it.

11.3.2 The Printer Improvement ToolsThis lead to the creation of the Printer Improvement Tools concept. The concept will cover a number of tools which will help the commercial printers with issues in their business. The tools will, depending on the subject, cover a range of different approaches. Each tool could consist of a package of questionaires, documents, articles and more. These packages can be sold towards the commercial printer and they will answer to a valid issue of theirs.

Five different topics have been selected:

• Improving your Website

• Improving your Marketing

• Improving your Services

• Improving your Strategy

• Improving your Personal Contact

The commercial printers can buy these tools on the Hello Solutions platform and they will help the printers with the given subject. A conceptual version will be explained through the first tool: Improving your Website (see figure 11.2).

11.3.3 TechnologyThe conceptual representation in Figure 11.2 is an online tool, integrated in the Hello Solutions communication platform. The tool could incorporate a number of technologies; depending on the needs of the commercial printer for each of the different topics.

11.3.4 ConclusionGenerating profits through the knowledge Hello will offer is a logical first step after the communication platform starts to become successful. The quality of these tools will need to be of a higher level compared to the (already available) knowledge on the communication platform. Profits can be generated through sales per tool, yet depending on Hello own goals it could also lead to yearly memberships which provide access to extra levels of content (e.g. The tools) on the communication platform.

Solution Improving the business of Commercial Printers by offering packages of knowledge and tools which can be easily used and implemented: the Hello Printer Improvement tools.

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Fig 11.2 An exemplifary concept of a Print Improvement Tool aimed at website development

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Fig 11.3 A representation of a number of the functionalities of Hello Update

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Hi Albert,

The �rst 10.000 copies just rolled of the presses.They look fantastic! It did notmess up the coating, so don’t worry. Will send it o� for binding now.

Best Regards,

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11.4 Hello Update11.4.1 FoundationIn the printing process there is a gap between the commercial printer and their clients. The commercial printers are keeping this gap in existence, worried that more transparency in the relationship will degrade their position. In the process of print projects (see chapter 6), in most situations the print buyer will provide the commercial printer with digital files for the project and within a number of days the print products will be delivered to the print buyer. Between the provision of files and delivery of the print products there are little moments of contact (i.e. touch points). Commercial printers are often worried that more transparency will make their work more troublesome, inviting uninformed print buyers onto their printing press floor. Even though Print Buyers have acknowledged that they would like more transparency and be more informed (see chapter 6).

11.4.2 Hello UpdateBased on these insights the Hello Update concept was generated. Hello Update is an application which allows commercial printers to inform their clients on the progress of the print project; when, how and where the commercial printer wants to. This application will transform the negative view of the commercial printers on transparency in the printing process into an opportunity; adding a new touch point between commercial printers and their clients (i.e. the print buyers). During a printing process there are always essential moments depending on each different project; the moment the cover of a magazine has just received its coating, when difficult steps

in the process are overcome, when the first complete print product is done, and more. By communicating these towards the print buyers, the commercial printers will improve the transparency during the project. The print buyer will become aware of the effort the commercial printer puts into the project, and how highly the commercial printer values the relationship with the print buyer.

Next to this main focus of Hello Update, the application can be easily expanded with more features. The Update system could also be used in more casual situations; when a commercial printers comes across a graphic design or an example of a specifically printed product. They can easily photograph it and share this with their clients. The application can include a printing handbook; a database featuring clear explanations of terms and process methods used in printing; which can be added to Update messages. This would allow a print buyer to easily learn more on the activities of the commercial printer, without them having to go out of their way to explain this. A new feature could keep a history of all sent updates and allow the commercial printer to quickly attach notes to specific clients; for remembering specific things about the relationship with a client.

The possibilities of this application are multifold and the application could develop itself over time. Version 1.0 will simply contain the update function, yet throughout its existence new versions will introduce new functionalities.

Solution Improving the bond between commercial printer and print buyer by keeping print buyers up-to-date on the progress of the print project throught the Hello Update application.

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11.4.3 TechnologyThe conceptual representation in figure 11.3 is based on a smart phone application. The smart phone allows for the commercial printer to create an Update in any environment, for example, right on the printing press floor. The smart phone allows for updates to easily be combined with photographs and to be send towards a broad number of receiving mediums; from E-mail, MMS, to Twitter. The concept could be supported through other mediums as well; a dedicated software applications for computers or a plug-in application in an existing computer program (e.g. Microsoft Outlook).

11.4.4 ConclusionThe application improves the transparency during the printing process, it allows the commercial printer to become more pro-active by stimulating them to take control and initiate the contact, and both function and design of the application are aimed at the needs of both the commercial printer and the print buyer.

The application gives Hello a strong platform to create a dedicated Hello application. It could evolve throughout its existence and offer more extensive functionalities.

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11.5 Hello Print StoreAs the Hello Solutions platform keeps evolving, Hello can broaden its view further and further. The first two concepts stayed close to the initial focus of the communication platform, this third one will be a more elaborate and integrated solution.

11.5.1 FoundationOne of the main trends within this market is the move towards digital printing and web-2-print services (see appendix 9). Many large companies have already paved the road and slowly small and medium sized printers are starting to follow online. Moving business online requires a change in strategy. The website can no longer focus solely on its promotional value; it has to become an online store front for the commercial printer.

Many of the larger commercial printers have, through cooperation with software developers, created their own software system for this online store front. Often these systems are rather complex, due to the many tasks they have to fulfill. There’s a long list of different products which can be ordered, many specifications, and so on. In today’s market there are a number of professional software developers, PaperlinX’ UplinX being one of the largest, which offer software created specifically for the commercial printing industry.

This software is advanced and well designed. Yet, it is often too expensive for small commercial printers to purchase. An

online store front would be an excellent addition for copy shops, or other small local commercial printers. Many small commercial printers which are venturing online are therefore currently creating their systems in-house with the help from an external ICT company, based on low cost software packages and software plug-ins. Though these systems work, they do not radiate high quality, neither are they user-friendly designed. A few companies have been explored which offer store front software towards small commercial printers, yet again it is of low quality. There is an opportunity to develop well-designed store front software for small commercial printers.

UplinX is one of the main suppliers of this software, and a sister company of Hello. UplinX has a number of software packages that covers this field: software for the basic store front, templates to brand this online store front for each different commercial printer, software to streamline the back office organization, software which creates a digital prototype presentation of an uploaded PDF, and various other services and applications (see Appendix 13). Through a partnership with UplinX, Hello has an opportunity to move into this in-depth field of the commercial printing industry.

11.5.2 Hello Print storeBased on these insights the partnership of Hello and UplinX can develop an online Storefront specifically for small commercial printers. UplinX will be mainly responsible for the creation of a specialized software package aimed at small

Solution Improving the online sales channels of small commercial printers through an integrated solution of products, services and software in Hello Print Store.

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commercial printers. It is advised that this is done on co-operation with a team of user focused designers. The existing systems has show that they can often be of a technological nature, in which a certain amount of knowledge on printing is desired to order print work. The clients of small commercial printers (which eventually will use the software) are often less knowledgeable on printing. The system will be a simplified modular system. The amount of functions should be concise at the start, yet it should provide the possibility to grow throughout its existence. If the commercial printer becomes more successful they will need to be able to extend the system. In figure 11.4 is a conceptual systematical represenation of this idea.

In this cooperation Hello will be able to provide the Hello Print Store clients with the proper paper for their online venture. In this way Hello will be able to link their product (paper) to a service and application (Hello Print Store) and create an integrated solution. Hello will furthermore be the trusted face of the venture and able to supply the Print Store clients with key information (from the Hello Solutions community) to stimulate their business success.

11.5.3 Business ModelMost software systems in this field will have high start-up costs which makes them unattractive to most small commercial printers; you do not even know whether you will be able to turn it into a profitable business at that moment. If UplinX would be able to develop a simple modular system, to keep start-up costs at a minimum, then the system will develop itself over time. If, for example, a commercial printer wants a system they will start with the basic functionalities. If the commercial printer is successful, they are able to extend the system with new functionalities. Through this business model the profit of the Hello UplinX Partnership will increase as the sales of their clients increases.

11.5.4 ConclusionThis integrated solution, Hello Print Store, is still in a highly conceptual stage. Based on the initial explorations of the market there are definite opportunities within this field. In this concept Hello will be able to put all its experience gathered during the development of the Hello Solutions platform into work, though it will demand careful preparation. An interesting field to explore in the future of the Hello Solutions platform.

A module which integrates the printer’s website with a prototype (dummy) service from Hello.

Fig 11.4 A systematical representation of the concept

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11.6 Portfolio Management

As these three concepts show, there are diverse opportunities for Hello in the future. As the Communication platform will progress, Hello may find that there are a number of directions they can take. To maintain a solid strategy throughout the development of the Hello brand, proper portfolio management is a necessity. Cooper and Edget (2008) define three goals for the management of portfolios.

Strategically Alligned to the VisionEach new solution should match Hello’s main strategy and vision. Hello should pursue the creation of a solid portfolio of solutions which do not negate each other, they should and carry out the vision of Hello. The brand vision (see chapter 9) will be used as a filter to guide innovation (Roscam Abbing, 2010).

Maximize the Value of the PortfolioTo maximize the value of the portfolio will demand constant mapping of each of the different products and both strategically and financially make sure they maximize the value of the portfolio. Resources are not unlimited and must be divided well. Too many project at the same time will lead to difficulties in the development process and, possibly valuable, projects will go lost.

Seek Balance in the PortfolioThe portfolio should be balanced in a number of ways. Cooper & Edget (2008) mention the division between longterm and shortterm project, or low risk and high risk. It even moves into the different product categories and target markets; balance should always be maintained to spread the risk.

This paragraph simply provides an insight, but due to the broadening scope in possible categories (represented in the reversed funnel model, fig 11.1) Hello will need to thread carefully in the development process of the solutions. Each project to the main strategy and vision of Hello Solutions.

11.7 ConclusionThough these three concepts are not definite, they have the opportunitity to be developed by Hello throughout the growth of the Hello Solutions platform. The objective of these three concepts is to stimulate Hello and PaperlinX to take a new look at their clients, to look beyond the client’s basic needs into the relationship between commercial printer and print buyer. The commercial printing market is going through a transition and Hello should use this chance to become part of the solution.

The strategy discussed in chapters 9, 10 and 11 can be used as a blue print and road map for Hello Solutions. Due to the complexity of building towards a complete strategy, and the implementation within Hello and PaperlinX, a number of issues has been left out and will need to be further explored by the company itself. The development and innovation of concepts are two of these factors. These, among others, will be briefly discussed in the recommendation chapter (see chapter 13).

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CH. 12

Evaluation

The project is appreciated by PaperlinX. The research and the final strategy appealed to the management of Hello. Though the project lead to numerous results, for this evaluation the following three topics were deemed most interesting by the author, based on the discussion with PaperlinX; innovation, client focus and the strategy.

12.1 Innovation

The Operating Companies are a powerful stakeholder in the Value Chain. Though Hello had initiated a number of interesting services in the past, up until now Hello has always been dependent on Operating Companies to deliver them. For Hello’s, and the Operating Company’s, clients this made it unclear what value Hello was specifically adding, if they were not delivering it. In this divergence between paper brand and operating company, the latter wins in power. Hello should therefore develop innovations which are for the greater part independent from the Operating Companies.

The operating companies have mostly focused on adding value by reducing costs for the commercial printers. For a premium paper brand the focus should be on adding value by improving the position or revenue of the commercial printers. It was found that Hello’s strengths lay in it’s high brand awareness across Europe, and their image of consistent quality. Hello wants to be the answer to the needs of their clients. This provides an excellent platform for innovation, which should therefore be driven by the needs of the clients.

These insights will demand a change within the approach of PaperlinX, and Hello. The brand manager of Hello agreed to the importance of this change, yet Innovation has never been supported to these levels within PaperlinX. Innovation is technology (e.g. Resource) driven. Yet, most of these resources aren’t Hello’s; they are the Operating Company’s. Hello has already started with the internal preparation of an integrated new strategy for the brand. These results will provide them with an insight in how to approach innovation under the Hello brand.

Through the progression of this project decisions were made and directions were chosen. The strategy was the final combination of all these results. During the course of the project the progression and the choices that were made, were discussed with Tan Brand Communication Consultants, TU Delft and PaperlinX. For the evaluation of the complete strategy it was discussed with the department focused on Hello Paper, at PaperlinX.

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12.2 Client Focus

Building on these insights the project focused on the needs of the clients; the commercial printers and print buyers. The print industry is suffering due to the commoditization of the print product. Unable to properly adjust business to the changes in the communication market their product started to lose value. The offer is greater than the demand, and focus moves towards price. Due to the current focus on technology and price by the printers, they do not spot the possibilities. The commercial printers are held back by their lack of transparency in their business, their focus on technology and their re-active approach. This vision was translated into a number of opportunities for Hello.

The analysis of the print industry was highly appreciated by PaperlinX. It was admitted that a number of the issues were known, yet the reasoning behind it and the opportunities it offers were never clarified or thought of. Previous innovations usually evolved from practical issues offered by commercial printers. This research provides Hello with a number of tacit needs in the market, which show a lot of potential to them for further exploration.

12.3 The StrategyThe opportunities spotted in the analysis of the printing industry were translated into concepts; a number of applications, services and integrated solutions of both. Though a number of ideas showed promise, the difficulty was found in the implementation under the current Hello Brand. Though Hello is a strong, high quality, brand name in paper, there was little base to promise quality in new categories. The concepts stood too far from the current brand.

Accordingly a strategy was created to transform the current Hello brand into a platform for growth; growth in variety of categories. The strategy builds on one of the concept to create a community under the Hello brand for the commercial printers. By creating a communication platform, to support and stimulate the growth of a community, Hello will have the chance to create their own relationships with their clients and therefore re-position its brand. Though the important relationship with the Operating Companies will always be an integral part of any venture Hello undertakes, it will no longer make them fully dependent. Hello will accordingly have their own platform, one which through proper development can transform itself to a sales channel for services and applications in the future.

The strategy was well received within PaperlinX. The overall strategy fitted properly with the previous research, and provides them with a roadmap to pursue growth within the brand. It was appreciated that the strategy seemed manageable; financial costs grows as the strategy evolves. Their worries were with managing the relationships with the operating company; they may be offended by this new service coming from a paper brand. Yet, a proper strategy which starts small and evolves in time could prevent this from becoming a issue according to the brand manager of Hello.

The new strategy for Hello is currently under development within the walls of PaperlinX and Tan. The communication platform is taking shape and a new marketing manager has been appointed to manage the platform. In January the first official steps will be taken in Hello’s new direction, in which this project will have a role to play.

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CH. 13

Recommendations

13.1 Research

It has been stated that Hello will be able to use their position in the communication platform for research purposes. Both qualitative research and quantitative research is possible. The exact methods Hello will use have not been explored in this project. PaperlinX’ and Hello currently have a market research department in place. This department should be able to create innovative methods to do research through the platform. Currently a lot of research could be more easily done through the communication platform, of which focus groups would be an example. It should not be forgotten that not all research can be done through the platform, it is also advised to perform more in depth studies with the print buyers; which are not a part of the communication platform.

13.2 InnovationResearching the market is one thing, transforming this into opportunities and product innovations is the next step. The approach this project presents, would require a fundamental

shift in the company’s structure and mindset. Currently Hello has already started with the implementation of the new strategy and it would be advised to continue this innovative trend. Hello needs to stay ahead of the competition.

Innovation will become a central role in this. This project takes a new look at this market; working from the view of the commercial printer and print buyers, instead of driven by technology and existing resources. The concepts provided in chapter 11 could for example be further developed. They should be aimed completely at the (tacit) needs and wishes of the commercial printers and their clients the print buyers. Hello will need the advise and knowledge of partners within this field. In the PaperlinX group Hello could for example seek advice from UplinX. More interestingly would be to seek help in specialized product and service innovation companies; companies which have a user-focused approach.

Another great opportunity lies in cooperation with universities. During this project a number of application and service opportunities have been recognized, which

The strategy provided in this report deals with many of the most important issues. Due to the length of this project, the author was unable to tackle all of the opportunities and challenges. In this final chapter a number of recommendations is made on the further development of Hello’s new strategy.

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could be further explored and eventually designed.There are possibilities to create interesting internships and design projects out of this; for example with the Industrial Design Faculty.

13.3 InternationalAt the start of the project it was decided, in discussion with the supervisors from Tan and the TU Delft, to leave the international and cultural issues out of the scope during the development. This would focus on the language barriers between the different countries. In the past Hello has usually started in a low number of countries, and through time implemented it in new countries. In this industry the United Kingdom and Germany are two of the most important markets. For this platform Hello could start with English and/or German, and accordingly spread to other languages. It depends on the financial possibilities of Hello and how they would like to implement the system themselves. The designed services and applications could be more easily developed in different languages.

13.4 The PlatformThe first steps of the platform have been conceptually designed. Accordingly, This has to be translated into a final

website. The success of the platform is dependent on a proper execution of the design. It is advised to have it refined and developed by a company with experience in the design of communication platforms. An example would be the company Communispace, yet there are also many (smaller) companies in the market with expertise in this area. The design of the usability, user friendliness and aim at the needs of the commercial printers, can have a great effect in the success of the platform.

13.5 Iterative ProcessEntering this new field will come with a change in method. The management of the communication platform demands a constant iterative approach, lead by the platform’s manager. An online platform allows for constant design; even platforms like Facebook and Linkedin change their functionalities on a weekly to almost daily basis. Though this strategy has been well prepared, there are always chances that things will turn out different. This should not be seen as a failure, but as an opportunity to improve and change the functionalities of the platform. The main goal should always be to keep the it alive, and the only one who can keep it alive is Hello. Hello will always need to offer a valid reason for commercial printers to come to the communication platform, and this reason will change throughout the existence of the platform.

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Interviews

InternalMargreet Sloot, Category Manager, PaperlinXRalf de Jong, Price Benchmark Coordinator, PaperlinXRoberto Cavicchia, Category Director, PaperlinXJohn Tibbe, Market Intelligence Manager, PaperlinX Ayolt Pruim, Manager Fine Paper at Proost & BrandtGeorge Knijnenburg, Regional Manager at BührmannUbbens

ExternalPeter Lagerweij, General Manager at commercial printer LibertasRobbert Bosch, General Manager at commercial printer Royal CallenbachMart Dijkstra, Owner at commercial printer Dijkstra & De BresserEls Teunissen, Graphic Designer at ElsewiseVikas Sonak, R&D Communication Manager at DSM in DelftEmployees of Tan Brand Communication Consultants

Websiteshttp://www.printingnews.com/http://whattheythink.com/http://www.printweek.com/http://www.fespa.com/http://www.printerslounge.com/http://www.printplanet.com/http://www.colorprintingforum.com/http://www.graphicdesignforum.com/

Interviews by TanAnthony Thirlby, Managing Director at commercial printer ESP ColourBarbara Kuhr, Head of Strategic Marketing at Epson EuropeCostin Mahalia, Client Service Director of MediacomDamiano Polcaro, head of design at BrandnationDaniele Sala, Communications Manager of B & B ItaliaNicola Simioni, managing director at commercial GRAFICHE SiZ S.p.AJob Stuijt, Senior Communications Advisor of RijkswaterstaatLucas ten Brinke, Head of Sourcing for Reed Business

These interviews were executed by Tan Brand Communication Consultants for Hello. A number of quotes was used in this report.

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In general I am satisfied with the final result of this project. It was my goal to work at a consultancy company, which proved to be a great experience; a professional context I can honestly see myself in the future. From the project itself it was expected, even hoped, that it would be challenging process. Afterwards it can honestly be said that those expectations were accurate.

At the start of the project it felt like being dropped in an ocean of information. My experiences in Business-to-Business, commodity markets, the paper industry and the printing industry were all limited. I soon found out that Business-to-Business is a different ballgame. In consumer markets I could more easily turn to my own experiences as a customer or user. In this specific Business-to-Business market basically each stakeholder is an expert, or at least highly knowledgeable. To design a new strategy and service concept(s) meant that I would have to aim towards becoming an expert myself in these fields.

The assignment of the project was vaguely described at the start of the project. It involved transforming Hello from a product- to a service brand. At the start of the project Hello had the idea of a customer intimacy platform as a starting point. After the initial explorations it was decided to take the initial assignment as the main goal: to provide a route

to transform Hello from a product brand towards a service brand. This broad scope created many challenges. It took a long time before I was able to get a firm grasp on the market, constantly digging deeper and deeper. For future reference it would be clever to sooner set my boundaries, and accept that there are limits in every project. Different directions, issues, ideas and plain old hunches were explored throughout the project. Some were dead ends and are not discussed in this report, while others finally lead to the creation of this strategy.

The project allowed me to dive into new creative areas, among others, social media and service design. The potential of social media as a tool in one’s strategy was very convincing. I also explored service design, a constantly developing field of which I was only able to touch the surface. A topic with an interesting relation to brand development, which demands further exploration and attention in the future.

Though it can not be expected that this graduation project will be identically implemented, I am proud that my results will reflect itself in the future plans of Hello. The Industrial Design methodologies were of great use during this project; the combination of creative thinking and a technological background. It allowed me to have a new take in a conservative market. The results of which Hello will hopefully pursue in their strategy.

Nick Poldermans

Epilogue

One has to draw the line somewhere.

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From commodity to serviceTransforming a paper brand

into a new category

MSC. THESIS BY NICK POLDERMANS

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