Specialty Graphic Imaging Association Digital Printing & Imaging Association
	Executive Summary April 2006

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Just Say NO to Commoditization
Avoiding the commodity trap is hard. Climbing out is even harder.

In our community of specialty graphic printers and suppliers, perhaps the biggest challenge on the horizon is commoditization. It’s happened to other market segments — we need only to look as far as commercial lithography to see how commoditization can limit growth, how it can adversely affect printers and suppliers.

Competition between commercial lithographers is aggressive to the extreme. Margins are squeaky tight. Quality, turnaround time, strong customer service — they’re all taken for granted. A slight difference in price is often the deciding factor between bidding companies. Commercial printers realize that they need to add value to keep customers, but value-added services and support cost money — and those squeaky-tight margins are still shrinking.

And so, commercial printers are looking for ways to break out of the commodity choke hold. Adding digital imaging technology is a step many are taking to improve their situation. They need additional revenue streams and ways of adding value to customers. We’re seeing a big increase in the number of commercial printers with in-house narrow- and wide-format digital imaging capability. Digital imaging is helping them in their battle against commoditization.

As a specialty graphics printer, you can avoid the commodity trap by continuing to take advantage of the latest technologies. We are fortunate today that specialty graphics is at the center of an innovation explosion, a competitive “Big Bang” period that’s delivering new imaging technologies and improving existing ones. Effectively using new and traditional imaging technology provides unique value to your customers; working with them to develop new, exciting solutions to their communication challenges is your best hedge against commoditization.

Suppliers and manufacturers in the community play a huge role in this plan to keep specialty graphics producers out of commodity trap: Providing a continuous flow of new equipment and supplies capable of disrupting the status quo is critical. Fresh, new capability pushes the community forward with added customization that defies commodity classification.

Commoditization and standardization go hand in hand. As a market segment becomes heavily standardized such as commercial lithography, commoditization is the result. With the rapid change we are experiencing in specialty graphics, standards are hard to set. Producers of specialty graphics who exercise their expertise and knowledge base to make the best decisions for their companies and customers are usually the best at avoiding the commoditization trap.

SGIA helps you keep your innovative edge, manage the fast pace of change and take full advantage of the opportunities available to you. We can help you build your brand and find the market segments that are the most lucrative and ahead of the commoditization curve.

Use SGIA resources. Stay informed. Make the best decisions for your company.