Sticking to the Plan
Kodak's continuing strategy of integration
By Noel Ward
In
this age of ongoing and mounting uncertainty virtually every type of
business is cutting back wherever they can. Thinner staffing and
reduced expenditures in a variety of areas are part of the new normal
and many printers have to be wondering how the support they need and
expect from equipment and software vendors might change. The answer can
vary substantially from one company to the next and no one can really
predict how the changes will ultimately impact individual print
providers.
It's probably safe to assume that overall service and
support of installed or newly purchased systems will remain unchanged.
After all, these are based on specific service level agreements and no
vendor is likely to drop the ball on this core level of support.
Another area, though, is how vendors will maintain their overall
branding and go-to-market strategies over the course of this economic
downturn. These days, those strategies are not just the positioning of
a company and its offerings to print services providers, but how they
reach out to printers' customers.
All the major players have
their own plans in this area and here in the first quarter of the year
is a good time to take a look at what some of these industry leading
firms are planning. First up is Kodak, the household name company that
has been reinvented in just a few years from being primarily known for
analog film and imaging to having state-of-the art products for digital
printing, offset printing, consumer photography and more.
Five
years ago Kodak CEO Antonio Perez and his management team laid out a
plan to integrate its separate operating companies: Kodak, Kodak
Versamark (previously Scitex Digital Printing), Nexpress (formerly the
Heidelberg Digital joint venture), KPG and Creo. While the latter four
have all been under the umbrella of Kodak's Graphic Communications
Group these business units had separate management, sales, marketing
and support organizations. The Nexpress and Versamark businesses are
now aligned as a single organization called Kodak Digital Printing
Solutions.
"It was natural and expected that we'd bring the two
digital print organizations together," says Kevin Joyce, Worldwide Vice
President of Sales and Marketing, Digital Printing Solutions, "but like
many things it’s an issue of timing. You don’t want to adversely impact
customers by moving too quickly, but from a competitive point of view
you don't want to move too slowly. This is the right time to do this
strategically for Kodak and moreover, it is intended to make it simple
for our customers to do business with us and provide revenue-generating
opportunities for their customers."
Like most of its competitors
Kodak offers both electrophotographic (EP) and ink jet print engines
and offers automated workflow software tools. At the same time it
offers products, equipment and software for offset printing. This
distinguishes the company in the marketplace and offers customers the
potential for one-stop shopping. Having a single source for the
majority of their equipment, service and supplies can be compelling for
printers using both digital and offset technologies. On one hand it
offers the potential for forging a deep and wide relationship with a
vendor and, on the other hand, should problems arise, provides "one
throat to choke," as some printers like to say.
The idea of a
single provider is of growing importance as ink jet printing shoulders
its way onto the playing field. Kodak's Digital Printing Solutions
organization places the NexPress and Versamark product lines under the
aegis of Isidre Rosello, formerly head of the Versamark business unit,
and he has listened when customers talked.
"Customers in many of
the markets we're in want to know which printing technology is best for
a given application. With separate sales, support and marketing
organizations we couldn't really provide the kind of holistic view of
all the choices that customers really needed," explains Joyce. The new
structure makes it much easier --simpler-- for customers to get the
information they need to make the best decisions for their businesses."
Why now?
Yet
given the turmoil in world markets for just about everything, why make
this realignment now? It seems as if there might be other more pressing
issues. But Joyce sees a greater opportunity.
"In my opinion,
this economy actually provides a great opportunity for digital print to
really prove itself as a marketing tool, especially when combined with
data mining and campaign management software that show the return on
investment from hybrid and integrated marketing solutions. I think
we're going to see a greater acceleration of this than we would have
seen if the economy had just stayed at its usual pace."
Certainly
almost every business that puts ink or toner on a page is under
pressure because so much of printed materials come out of marketing
budgets. As usual (and in the face of all logic) marketing and
advertising are the first places companies look to cut their costs.
Like Joyce, many proponents of digital print, myself included, believe
that if marketers and their clients would wake up and smell the toner
and ink, they'd be all over digital printing as part of a marketing
program that could deliver the results that prove the value of their
marketing investments. But waking them up is the trick.
Walking the talk
Part
of Kodak's plan for the wake up call is continuing to educate print
providers and their customers about how digital print can be a
effective strategy for succeeding in our down economy and to come out
stronger and more profitable. Walking the talk, Kodak is changing its
outreach to rely less on trade shows and putting its efforts and
dollars into communicating with print providers and their customers on
a business level rather than an equipment one, explains Dave Wigfield,
General Manager, Prepress and Digital Printing, United States and
Canada.
"One of the things we've done over the past year is help
printers and their customers get their databases together so we can
reach out to them more effectively on a one-to-one basis," he says.
"We've developed programs that define customers segment by segment and
also link products and solutions. This shifts the focus from selling a
box to showing a printer and his customer how adopting the right
digital technology is a smart move for their business."
These
include programs that help printers build business plans, explain the
new capabilities to their customers, and how to use Kodak equipment and
software more effectively so they can see a faster return on their
investments.
Kodak drew a lot of attention --and some
criticism-- at the AIIM/On Demand conference two years ago by
significantly limiting the amount of equipment it brought to the show.
Pundits questioned the wisdom of this move, but the "less is more"
approach has proven effective. As a continuation of its trade show
strategy that started in 2007, Kodak has opted not to exhibit at this
year’s AIIM/On Demand conference. Kodak will be at PMA without
equipment, focusing instead on applications and business growth
opportunities made possible by Kodak’s solutions. This approach to
trade shows has freed up resources for road shows, bringing customers
to demo centers and the like, tactics that have proven to be effective.
"It lets us do a better job of walking the talk and relating to
customers on a more personal level," explains Don Whaley, Director of
Marketing for the US&C Region of Kodak’s graphic communications
business. "It takes the pressure off the customer to travel to a show
and positions our sales reps more intimately with customers. For
example, suppose we do a targeted 1-to-1 promotion inviting customers
to attend on of our road shows. Having the sales reps involved in the
whole process provides better cross-training for them and that results
in a better customer experience."
"At the end of the day it
changes the way we think and the message our customers here," says,
Wigfield. "It really says, 'We want your business,' and that's a
critical message to communicate these days."
"It's a real
continuation of our portfolio," says Jeff Hayzlett, Kodak’s Chief
Marketing Officer. "Whether it's offset or digital, it's Kodak, and we
have the solutions a printer needs to grow his business. The companies
that survive in tough economic times are the ones that are easy to do
business with, and as Kevin pointed out, we want to make it simple for
customers to do business with Kodak."
Kodak is also ramping up
on how and where it is promoting itself. While conventional wisdom is
to reduce marketing expenses when the economy is soft, Kodak is
actually increasing its efforts. This has historically proven to be one
of the best moves a company can make when times are hard. Companies
that promote themselves throughout an economic slump almost invariably
come out stronger and better positioned to succeed when as business
improves.
"Where other companies are backing out of things like
sports sponsorships we're actually increasing our visibility," says
Hayzlett. "We're doing things where we find more aggregation of
customers and will be doing more one-to-one activity, giving our sales
people more tools, adding more road shows and really trying to get in
front of the customer as much as possible," explains Hayzlett. "And
that's in Europe and Asia as well as in North America."
"We've
organized ourselves into segments and are offering a solution, not just
equipment," he continues. "There are solutions and toolsets for
packaging, publishing, commercial print, and so forth, so we show a
customer how to use Kodak technology in the marketplace, all through
our go-to-market sales organization."
Finding its own road
For
the past few years Kodak has taken a different road than many of its
competitors. This is primarily because it is really a different type of
company than the other players in digital printing, has grown out of
acquisition of other firms, and because it competes in a wider number
of market segments. With the Digital Printing Solutions group looking
to further redefine the company both internally and to the marketplace,
the challenge for Kodak will continue to be how to press forward in a
weak economy while managing its still evolving strategy.
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