Commentary & Analysis
FREE: The Supplier's Perspective on Association Consolidation
By Cary Sherburne
Published: December 19, 2003
The industry's leading Associations primarily serve printers, yet most of their income is derived from suppliers via sponsorships, memberships and tradeshow participation. As we wrap up this series on Association Consolidation, WhatTheyThink asked industry suppliers to share their views.
The responses we received are included here, and as one might expect, they reflect a diversity of opinion.
- 3P Inc., Agfa, Enovation, Heidelberg, KPG, Komori, MAN Roland and Presstek.
Larry Miller, Partner, 3P Inc. (Retired from Tec Systems and Baldwin Technology)
As a member of the PIA Board of Directors and a long time supporter of various organizations as a supplier company, the topic of consolidation is of growing interest.
As Frank Romano so correctly states, the supplier companies are a major source of funding to industry Associations, and the suppliers no longer have the funds to support the numerous appeals they receive. Most Association meetings and conferences today are highly subsidized by the supplier community. I'm sure most Association leaders will attest that the pool of suppliers they can look to has decreased substantially. This trend will not recover with the economy, simply because the margin dollars available are no longer available.
In lock step with this fact is the printer community as they are also seeing massive cost pressures and resulting margin erosion. The long-term result may be an economically stronger, but much smaller group of companies in the future. The present associations will have fewer companies available for support.
A well planned, strategic approach to Association consolidation today, would allow for a more viable and representative group tomorrow.
Susan Wittner, Marketing Director, Agfa Corporation
As a leader in promoting print awareness and a major supporter of Print as the medium of choice, we at Agfa feel it is paramount that the various groups, printers and vendors work together to help promote the vitality of the printing industry. Regardless of whether individual organizations work with each other as unique groups or consolidate together under a common banner, the goal of promoting the power of print should come first and foremost.
For example, at Agfa we are working hard to make sure those responsible for directing advertising campaigns recognize the power that a coupon, a postcard, a circular or a label has on consumers. We believe that the combined power of everyone in the industry united by the desire to promote print as an essential part of a marketing mix, no matter what organization one belongs to, will help the industry to flourish. We encourage groups to do what they feel is right to most effectively promote the industry.
Tim Combs, Enovation, Senior Vice President of Sales and Marketing
The direction toward consolidation of the trade associations is a logical one in light of the same course within the printing community and its manufacturers and suppliers. The benefits of optimized efficiency, reduction of operational costs, elimination of redundancy and improved communications through a single point of contact would be realized by all parties.
The printing community has seen vast consolidation in the past two decades and Enovation itself created a new distribution model through its acquisition and consolidation of the Fujifilm graphic arts dealer channel. The great value that the trade associations bring to both the printing community and the manufacturers and distributors will be enhanced and assured a future by this action.
Niels M. Winther, President and CEO, Heidelberg USA
Based on my experience and knowledge of the major associations, they bring a tremendous amount of value to their membership and to our industry. They offer valuable resources to help printers grow profitably.
In the short-term, I do not see an immediate need to force a merger between these fine organizations. However, I would encourage collaboration to organize joint events which would benefit all organizations' memberships. Our industry associations are capable of reaching new levels of efficiency by avoiding repetition and delivering robust value-added services and discussion forums. In this scenario, organizations would pull from their memberships and would experience a natural rise in participation. In addition, this could provide an atmosphere of natural integration over time.
Rick Mazur, Vice President, Marketing, United States and Canada, Kodak Polychrome Graphics
Kodak Polychrome Graphics (KPG) has long-standing, mutually-beneficial partnerships with numerous industry trade associations. Ranging from groups that serve the broad interests and needs of the industry, to those that specialize in niche segments and highly-targeted audiences, KPG enjoys strong relationships with these organizations because we share common objectives: providing their members and our customers with the tools and knowledge to advance their capabilities and grow their businesses.
For trade associations of all types and sizes, the focus more than ever needs to be on providing members with the education, research, data and training in digital technology, business management, human resources and other areas that are required for success in our rapidly-changing industry. KPG will continue to support trade associations in these efforts.
Stephan Carter, President and COO, Komori America
The needs of the Graphic Arts Industry demand a re-thinking of the way participants associate and concentrate their strength and energy for the betterment of the industry. The current fragmentation of associations leads to duplicative effort, excessive cost, and a diminution of the industry's strength in attaining its goals. Equipment manufacturers and suppliers are finding it more and more difficult to bear the cost of subsidizing all these organizations through multiple annual tradeshow exhibitions and direct contributions.
Consolidation of the associations combined with special interest sub-committees to ensure a breadth of industry coverage is one way to go. Alternatively, creating an overarching Steering Committee consisting of representatives of each of the major associations might be a good compromise approach. This group would have the role of managing a long-term strategic planning process, where a clear division of duty and responsibility is delineated between each of the associations. In this way, the industry could concentrate its efforts and avoid wasteful duplication on issues such as postal reform, taxation, and industry standards.
Yves Rogivue, CEO, MAN Roland Inc.
The main purpose of any trade association or foundation is to provide a framework that unites an entire industry so its common concerns and challenges can be addressed more effectively through collective action.
There's always room for improvement. Most trade groups represent too narrow a range of interests. Manufacturers like MAN Roland are going to keep pushing GATF/PIA, NAPL and all the other trade associations that are connected to the graphic arts to do more, just like our customers are pushing us to do more. At the end of the day, that makes for a stronger industry.
As the primary partners in the Graphic Art Show Company, GATF/PIA and NAPL with NPES do a good job of bringing together manufacturers like MAN Roland with printers. Trade shows and conferences are great, but I think we need to raise the question whether that's always the most effective format to get us together.
We'd like to see greater cooperation among all of the many graphic arts trade associations and educational institutions. It's up to our associations, in their role as educators, lobbyists and arbitrators to rebuild the relationships, restore confidence and promote understanding throughout the graphic arts supply chain.
Ed Marino, President & CEO, Presstek
Frankly, I am a big fan of consolidation. There are two ways that a consolidation can positively impact the industry. The first is critical massthe "power in unity" concept. A larger, more substantial organization is better prepared to provide benefits to its members and to influence the industry than a group of more fragmented associations.
The second is relative to the demands on association members' time. Time is a senior executive's most precious commodity. A consolidation would help us focus that energy and time into a single channel more effectively. By the way, this consolidation discussion applies to other aspects of the industry as well, including trade shows and more. It is time for consolidation; we are just too fragmented and our efforts are diluted.
Of course, with consolidation you will always give up something. But new initiatives are cropping up all the timelike the Print Counciland we will continue to fragment ourselves and ultimately be ineffective. This industry is in trouble, and I would much rather see a unified Armyrather than a bunch of mercenariesattacking this problem.
Wrapping It All Up
This week's discussion on association consolidation has generated lively discussion that applauds the associations for the fine work they are doing in support of our industry, but at the same time provides substantial food for thought as they move into the future. We all agree that times are changing, and much as the providers of graphic arts products and services have had to make adjustments in their businesses to thrive and survive, the associations must do the same.
We share a set of common goals. The only way those goals will be achieved is through a stronger spirit of cooperation across the board, and a recognition that the threats to our industry emanate from both outsidewith the plethora of non-print alternatives customers have availableand from the insidewith fragmentation and dilution of resources.
We at WhatTheyThink would like to thank all of the contributors who made this healthy, relevant and important discussion possible, from the thought-provoking kick-off provided by Frank Romano, to the contributions of the association leaders, industry suppliers, and perhaps most importantly, from the many, many printers who weighed in on the subject.
We believe this discussion must not stop hereat the end of a difficult year. We hope our readersfrom all constituencieswill give careful consideration to the issues, suggestions and opinions that have been included here, and will take informed action in the year to come to build a stronger, healthier graphic arts industrytogether.