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Commentary & Analysis

Market Repositioning Done Right

By Barbara Pellow September 20,

By WhatTheyThink Staff
Published: September 20, 2006

By Barbara Pellow September 20, 2006 -- Faced with overcapacity, ever-changing market demands and commoditization of printed materials, graphic communications service providers are seeking to stave off decreasing and often disappearing profits. Some who are seriously challenged employ knee-jerk tactics that cut margins and sometimes irreversibly damage their businesses. Others are aggressively focused on taking advantage of repositioning. Repositioning is a strategic decision that builds and expands your core competencies. It is a long term redirection of your business versus a short-term promotion or price cutting designed to stimulate quick cash. Repositioning is a strategic decision that builds and expands your core competencies Repositioning is about change. It is about repositioning your company in the mind of both existing customers and prospects. From a marketing perspective, you need to be seen as having a portfolio with few credible substitutes and then building the right level of market awareness. How your company is positioned and perceived in the marketplace is a significant determinant of success. It determines the number of sales opportunities you receive. It determines whether you can breeze through your prospect's qualifying rounds to the finals, or whether you will even get a seat at the table. Positioning also determines the prices you can charge and the margins you realize. Every Tagline Tells a Story In reflecting on the graphic communications market, a number of firms are striving to reposition their organizations as marketing communications firms, as an integral part of supply chain management or as a document management partner. You are seeing the emergence of new taglines and strategic direction. For example: * Standard Register has a new tag line "Managing the Documents You Can't Live Without" * The Strata Companies tells clients "We are not a design firm, advertising agency or printer, but your single source for meeting all your marketing communication needs" * Cohber Press tells clients that they are "Bringing you next generation marketing solutions." From basic collateral and marketing support to CRM and strategically driven direct marketing campaigns, Cohber gives clients and agencies a single source for integrated strategy, production and analytical capabilities. * Henry Wurst, Incorporated, is headquartered in Kansas City, MO and says its mission is to provide outstanding counsel, information, and communications products and services to facilitate development of its customers' businesses. A Repositioning Success Story This past week, I talked with Doug Hammerseng, Vice President of Sales and Marketing for Minneapolis-based GLS Companies. With revenues in excess of $36 million, GLS was identified in the Graphic Arts Monthly 101 report as one of the top companies to watch. President and CEO Gary Garner founded General Litho Services, Inc. (now GLS) in 1984 as a sheetfed offset business. Today, the firm employs almost 300 people in a 161,000 square foot facility. According to Hammerseng, "Gary Garner is a visionary and is always looking for the next opportunity to reinvent the company for market growth." Gary saw huge opportunity 15 years ago in direct mail and invested in a lettershop. Ten years ago, Gary realized he needed to support some of his clients with creative services to help develop "print friendly pieces". Today Garner has a staff of seven creatives. He broadened the portfolio to incorporate warehousing, distribution and fulfillment. And he expanded both traditional and digital print capacity. GLS added an IT department and hired a chief technology officer. They build web sites for clients to make it easy to do business with GLS. The company has repositioned itself as a firm that provides "Integrated Communication Solutions" which incorporates creative, print, mailing and distribution services. The repositioning process has been well done at GLS. The most successful repositioning strategies start out on the fringes of a business' core competencies. For GLS, starting up the direct mail lettershop was closely aligned with existing skills. Creative services gave the firm a "time to market" advantage for key customers; warehousing, fulfillment and distribution was closely linked to traditional print, digital print and direct mail operations. When you visit the GLS web site, the first statement you see is, "At GLS, we've worked hard at building a solid reputation around great printing. As our clients' needs have changed, we've changed, too--adding technologies and services that allow us to provide a full range of Integrated Communication Solutions." Gary Garner had a deliberate expansion plan based on defined customer needs that gave him the ability to develop a larger share of customers' business. Resource Allocation Repositioning also means there is a strong need to allocate resources. Gary understands that repositioning means that you need to increase the quantity and quality of communications, and speak more clearly and more often to establish your brand. It requires incurring additional costs in areas like: * Employee training * Revising a web site * New sales materials * Publicity * Signage * Advertising * Direct mail The secret to communicating a brand repositioning effectively is to start internally. Firms need to develop the messages and explain the reasons behind the repositioning and discuss them with the staff. Everyone on the staff should be on-board and be able to consistently articulate the new messaging. Once the identity is established internally, then it is time to focus on sharing messages externally. GLS has focused on customers that are looking for "Integrated Communication Solutions". Hammerseng said, "Internally, we discuss print programs versus orders. We focus on longer term print agreements and being the customer's primary supplier for our comprehensive suite of services." GLS has developed a blue chip client base that includes firms like Piper Jaffray, Cargill, Securian and Graco, Inc. With the Integrated Communication Services messaging well accepted internally, marketing efforts shifted to external communications. According to Hammerseng, GLS has done 15 customer touches this year to both instill loyalty and maintain high visibility and awareness. This includes sending a Thanksgiving card to thank customers for their business as well as a Holiday card; a custom newsletter called Direct Connections is delivered on a quarterly basis; four client based training seminars are conducted annually and there is contact by direct sales representatives and customer service personnel. The GLS education schedule for the fall includes topics like "Navigating Your Way Through Pre-Media" and "Getting Personal--Making the Most of 1:1 Marketing." To reinforce the market positioning and show off its new 43,000 square foot expansion, GLS conducted an open house with a clever Vegas-style theme this past June. Visitors were greeted at the main entrance, where they checked into Hotel GLS and received their V.I.P. Club Card & Map that featured each department as a hotel on the strip. Guests were encouraged to take the self-guided tour of the "GLS Strip" and view all of the exciting changes the company has recently undergone through its remodeling and expansion. The hotels featured were: Paris (Creative), Luxor (Packaging), Mirage (PreMedia), Venetian (Indigo), Bellagio (IT), Caesars Palace (Print), MGM Grand (Finishing), Treasure Island (Mailing) and Excalibur (Distribution). And to top off the event, Elvis was "in the building." Repositioning Done Right Gary Garner understood that repositioning was more than a new tag line appended to a corporate logo. He took the time to assess current competencies and industry trends, and listened to customer needs. With that input, Garner followed four key principles essential for effective repositioning. 1. A deliberate strategy for expanding services aligned with its base core competency of printing 2. A focus on a combination of the right acquisitions, equipment and infrastructure to deliver on the promise of "Integrated Communication Solutions" 3. Ensuring that an employee culture was in place internally and consistent with the corporate direction 4. Effectively communicating the new positioning to external customers The effectiveness of the repositioning is clear. It is demonstrated through business results. GLS grew 36 percent last year, with revenues in excess of $36 million and 2006 projections are revenues of more than $42 million. With technology, the only constant in today's graphic communications market is change. Savvy service providers need to understand what's required to effectively reposition their businesses. GLS offers a good model to follow.



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