As Grupo Nación saw the commercial printing market in Costa Rica become saturated, it sold two of its printing presses and invested in new technology it believes will create new markets, including promising opportunities in the consumer space.
“We wanted to pivot our [commercial] printing where we thought there would be more opportunity,” says General Manager Pedro Abreu.
The Costa Rican media company bought an HP Indigo 7600 digital press — the first of its kind in Central America — in 2013. Based on its initial success, it bought a second one in November 2014.
“We feel that digital printing is a growing business,” Abreu says. “It’s still not as much as the commercial printing we had before, but it’s growing and it is an area that we think should have a lot of growth in the years to come.”
The Indigo digital presses allow for cost-effective production of a wide range of high-quality print products in short runs of up to several thousand copies.
Digital presses are highly versatile, and they are capable of printing a broad range of products on high-quality paper stock. They also provide the opportunity to personalise each individual copy, which is a boon for marketers. Unlike traditional printing presses, ink — not paper — is the primary expense for low-quantity print runs.
“Those are the types of new businesses we are looking to get into. We can reach a much larger market, and the margins are attractive,” Abreu says. “We’ve been accustomed to having very few clients print a lot of volume. We’re trying to switch to a model that has many customers print a little, with higher margins. That’s the plan.”
Grupo Nación’s initial digital printing work included brochures and fliers for small- and medium-sized businesses that don’t require high-volume print jobs. It has also printed yearbooks for colleges and annual reports for corporations.
“We have done a lot of these, because they have a nice volume — not big enough for traditional printing presses, but still enough to be a nice volume,” Abreu says. The organisation is still trying to find the optimal point where printing on the Indigo presses is more efficient than on traditional presses.
“Around 3,000 to 4,000 copies, it’s still cheaper than a traditional printing press,” Abreu says. “At 10,000 copies, it’s a little bit more expensive. Once you go more than 5,000 copies, it depends on the size.”
For Grupo Nación, the digital presses also provide an opportunity to create a new consumer market for digital printing. The organisation created a self-service Web site allowing consumers to order digitally printed products, such as coffee table books. It has even printed and sold personalised place mats with the name of each guest for children’s birthday parties.
Grupo Nación is also developing an app that will allow smartphone users to select photos from their phones to be printed. Abreu believes consumers have been frustrated by traditional options to print digital photos at retail establishments, which often require manually transferring the digital images from the phone to a memory card.
Grupo Nación believes an app that allows users to order prints directly from their mobile devices will make ordering printed photos easier and more attractive for consumers.
While Abreu says introducing these new services to consumers has been more challenging than in more developed nations, Grupo Nación is the first in market with the technology. “We don’t know if we moved too fast, but it’s definitely something that’s going to come around eventually,” he says.
Grupo Nación is also developing a self-service Web site for marketing agencies, allowing them to negotiate a price for a job and then handle the details themselves. With existing clients, “we have to change how they’ve been accustomed to working with us,” Abreu says.
Another key challenge, Abreu says, has been working to shift the mindset of Grupo Nación’s commercial printing sales personnel, who are accustomed to marketing a high-quantity, commodity-priced product — not a premium-priced, lower-quantity one.
“The major thing we have learned is that these are not the same customers, and these are not the same businesses,” he explains.
The company has also retained one traditional commercial printing press, and it continues to print two of its own monthly magazines, inserts for its newspaper advertisers, and products for its larger customers, including direct marketing companies. Yet Abreu believes the digital presses have the potential to open new markets for Grupo Nación.
The technology, Abreu says, “is more business-to-consumer than commercial printing, which was business-to-business. We feel there’s an opportunity there. We don’t know which areas will grow, but we’re fine tuning and seeing different opportunities.”
This is one of 14 case studies featured in INMA’s strategic report “Revenue Diversification Beyond Traditional Print and Digital,” released in December 2015.