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Cost and Benefit of Value Added Printing (VAP) – Management Summary

The term Value Added Printing (VAP) was created some years ago. Users of print products with high-end finishing needs can now access entirely new production and value-adding potential based on the techniques of print providers and technology vendors. Accordingly, the term encompasses not only the end product, but equally the associated techniques, services and produc-tion process. By Jochen Wied.

The undergraduate paper „Cost and Benefit of Value Added Printing" primarily deals with the impact of the end product on the consumer, plus the question of the potentials and value of print products with high-end fin-ishing. It examines the cost/benefit ratio of print finish-ing alternatives. Several surveys were conducted for this purpose, mainly addressing the subjective and emo-tional assessments of the observers. These observations are incorporated into the process of quantifying the ad-vertising 'value' of finished print products. The quanti-fied data constitute the basis for a quick comparison of the cost and benefit of print finishing, and are intended to serve the brand owner and print buyer as an easy-to-use tool to help decide for or against the use of en-hanced finishing technologies, and as a source of infor-mation regarding the impact on the consumer of print products with high-end finishing.
The paper is part of the project „PRINTplusX – The Secrets of Value Added", which was launched in coop-eration between PrintCity and the Fachverband Medi-enproduktioner (f:mp.) media marketing organisation.
The findings obtained are based on scientific sur-veys, conducted in the form of interviews with over 100 respondents from various countries at Drupa 2008, and a German language online survey in which more than 400 experts from the different segments of the value chain of the print and media industry took part.
The PRINTplusX Folder
For the interviews at Drupa, the PRINTplusX Folder was used as the object for assessment. This allowed the collection of data regarding the value of Value Added Printing with the help of correlation matrices and semi-structured interviews.
The Folder contains not only information regarding the project itself, but also fictitious advertising media with high-end finishing for the imaginary „XOOX" brand. Three luxury lifestyle products were devised un-der the umbrella of the brand: „Xcalibore", a Full-HD Active Matrix OLED TV monitor, „Xcelerate", a Smartphone, and „Xcellence", a modern range of de-signer tableware with a precious-metal look.
The Folder presents images of each of these three products with three different levels of finishing. The first level consists of conventional four-colour printing plus just a protective varnish. The advertising media were finished in different ways at the second level, partly with pigmented effect varnish (tableware range), partly by the double-varnishing method with pigment ink or by the hybrid method (Smartphone and monitor). Finally, the third level involved full finishing, where the respective varnish effects were additionally enhanced by cold foil blocking.
Each respondent was asked about the emotional im-pact of the three levels of one of the virtual products. Attention focused on the estimated product price in rela-tion to the estimated product quality. The explicit aim was to establish how the quality of the product (high or low) was assessed by „customers" on the basis of the advertising medium.
The advertising value of finishing
A higher degree of finishing entails higher overall costs. This always gives rise to the question of profitability, which means determining whether enhanced finishing is capable of achieving sufficient differentiation from the competition or whether the cost of the finishing is greater than the benefit.
To determine an Advertising Value of Finishing (AVoF), a formula was developed whose elements were calculated from the quantitative survey data and sup-plementary scientific findings in the field of brand re-search. This formula offers a starting point for answer-ing the profitability question.
The factors involved in the formula are as follows:
• Weighted value for the price estimation
(taken from the Drupa survey)
• Weighted value for the quality estimation
(taken from the Drupa survey)
• Weighted general estimation of added value
(taken from the online survey)
• Weighted willingness to invest more
(taken from the online survey)
• Value for increased product loyalty through
multisensorics (from brand research)
• For packaging: value for greater advertising
impact (from brand research)
• Value for higher order levels through finishing (from brand research)
If the ratio of the result of the formula to the respective (extra) costs for print finishing is calculated, the result indicates the trend of the profitability of the respective type of finishing.
The AVoF formula, detailed explanations on its use, and further information on the subject of Value Added Print-ing can be found in the original thesis paper by Jochen Wied (in German), which can be requested from Print-City at info@printcity.de.
The following is a summary of the key results of the paper:
Impact of print finishing
• In print finishing, it is frequently the case that less is more. Not every kind of finishing is appropriate for every print product. It is therefore important to put print finishing technologies to targeted use, in a manner tailored to the respective advertising mes-sage, the product and target group. Perception can vary greatly from observer to observer, dependent on emotional, cognitive and cultural aspects.
• The survey results indicate that there is great de-mand for finished print products, and that roughly half of all printed advertising media can be mean-ingfully upgraded by means of print finishing.
Importance for printers
• The goal of medium-sized printers must be „differ-entiation": either by moving towards auto¬mation and increased productivity while simultaneously concen-trating on their own core business, or by specialising in particular technologies and simultaneously achieving very high quality standards.
• The printing substrates to be used must always be examined, in combination with the selected finishing methods. This is for technological feasibility and the sensory impact on the observer – the substrate is part of finishing.
• When devising the concept for a finished print prod-uct, all the companies playing a part (customer, de-signer, printer, any additional suppliers) should ide-ally be involved from the outset in order to avoid mistakes in the planning phase.
• Using a print finishing technology only makes sense for a printer if it permits cost-efficient production. A good alternative to an unsafe investment in new technologies is to cooperate with other printers and finishing specialists.
• Finishing technologies that are not yet in widespread use, but are undergoing constant further technologi-cal development and thus becoming economically viable, offer good niche opportunities for printers.
Importance for brand owners
• When building and establishing a totally new brand, a multi-channel communication strategy is fre-quently necessary. Public relations is a must and printed publications & advertising have to be com-bined with other channels e.g. with TV and the In-ternet, in order to maximise total impact and ROI. For brands that are already established in the mar-ketplace and to communicate an image that differs from the competition, print can often be the pre-mium choice however.
• The quality perceived by the customer is decisive. This makes the packaging a crucial communication medium when it comes to selling at the POS. The quality of the packaging or the advertising medium should generally be fitting for the product, i.e. have the same or a higher-quality appearance. The finish-ing elements used must suit the advertising medium itself and its contents. Consideration must also be given to the complete life cycle of the finished print product: the lifetime of the print product must be adapted to that of the advertised product, and it must accordingly withstand the ambient conditions to be expected.
• The customer's product loyalty doubles if a brand can be experienced with several senses. This has been demonstrated by research in the field of multi¬sensorics.
• The key influencing variables for determining the AVoF are the estimation of the product quality and the price, the estimated added value and the willing-ness to invest more, the type of print medium (pack-aging or advertising medium, consumer or industrial goods) and, above all, the question of whether just one or several of the customer's senses are addressed strongly enough to be remembered.
• Generally speaking, enhanced print finishing affords a print product added value in that it intensifies the impact of a message to be communicated to the cus-tomer.
Conclusion
Value Added Printing has a future. However, it is essen-tial to clarify beforehand what this will mean for a par-ticular company and what direction should be taken in the future. For printers, this means that they must coop-erate closely with their existing customers, in order to mutually exchange information and thereby permit suc-cessful further development of the individual advertis-ing media. This will ultimately enable them to position themselves clearly in relation to the competition.
Print finishing does not always produce the desired success. After all, enhanced print finishing first of all causes costs that have to be covered by a higher sales volume or a higher price. When using the AVoF for-mula and calculating profitability in the print and media industry, the rule should be to offer the customer (print buyer) not the version with the highest profitability value, but an individually tailored solution. It should be borne in mind in this context that the print medium and its content should match the product to be advertised as perfectly as possible in terms of design aspects, achieve the highest possible recall value among the ultimate customers, and allow cost-efficient production. This en-sures that every print medium with high-end finishing is not an „off-the-peg" product, but – in the customer's eyes – a high-quality, unique and custom-made product that is worth paying a higher price for.

 

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