This is the third episode in our INKISH.TV BizzView/talk interviews and as usual we ask pretty much the same questions, but the challenges and the answers differs. In this episode the Finish CEO of the federation explains about a VERY interesting scientific research that has been conducted by a Finish Prof. Petri Parvinen. On INKISH.TV an English summary can be downloaded for inspiration
The Federation we are working together with is the Finnmedia, the Finnish Publishers and Printing Association umbrella organization, so my colleagues here are newspaper publisher, magazine publisher, book publisher organizations. We are a team of around 30 people here altogether, although our organization is extremely small. We are trying to help the printers, our member companies to succeed in their business and of course, it’s tough times and the world is changing rapidly. So in a way I feel also that it’s a kind of, you could say, an educational role of trying to keep them up to date, especially the small ones, which are not following what’s happening in the world, and trying to keep them up to date on all the developments.
Well, different channels – we have our meetings, we organize seminars every now and then, then we have our member magazine, Printed Media magazine, and then of course newsletters. Also every now and then we organize some trips, for example, now we will go to Drupa with around 20 of our member companies.
We have around 180 member companies, but theoretically there are almost 800 printing companies, or companies that are registered in the printing area in the official coding, but when I talk to the paper merchants they say that they have perhaps 300 companies that are buying and using paper from them, but almost all the big ones are our members, and a lot of small ones, also.
Well, there are different reasons, perhaps for us the most challenging reason is that there are nowadays new printing companies, digital printers that used to be copy shops and doing these kinds of services and they haven’t been traditionally organized in the printing. They are not using our Union Agreement for the so-called Book Workers, or how it used to be called The Book Workers Agreement, so that’s a challenge for us to try to get them to join.
Yes, I think we have our own services and really also the possibility of networking. I think that’s very important part of our role in the business to have a platform of networking, but the challenge is really that our members, or most of our members, are in the traditional Book Workers Trade Union Agreement and utilizing that. These new digital printing companies have other agreements which are different and from the employer’s point of view in some respect better, because in our agreement, we have a lot of free holidays, long summer holidays and winter holidays and such, and in the other agreement they are a little shorter, so it’s more working time per year and that’s a little tricky for us.
Well I think, of course as in all countries, there’s the challenge of the media use and it’s going more to digital, so printers are suffering when volumes are going down, but then if you think of Finland I feel that here we have a bigger challenge concerning that Finland used to be a country with good economics and strong economic growth. It was very much what we call the ‘Nokia effect’, that Nokia was a good driver of many businesses here and everything looked good and people felt well and after the collapse of Nokia, or when Nokia finally sold out the mobile phone business and the Finnish economy has gone down. The other strong part of the Finnish economy was the paper industry and of course, when the consumption of paper has gone down this has been smaller, so our export has been smaller and this has given, or led to a kind of negative climate. The Finnish people are thinking that the situation is not good and of course also the politicians are talking about that we have to save and save and save, which also has led to a situation that a lot of companies are thinking of saving, not really doing business and creating business, but trying to do their profit by saving and as you know that’s not a good way to go in the long run, of course. You have to be competitive and save by cutting down extra costs that are not really needed, that were created during the good days, but after that you should really start to invest. So, the advertisers are really weak on investing in advertisement and of course our industry is suffering from that. The printing industry used to be a business where you didn’t have to sell yourself. It was more waiting for your customers to ask how much does it cost to print a 16-page brochure, or something like that and a lot of the printers are still in this basic mood, they are not a real active sales organization, but more a production organization, and I think because of this many printers are suffering.
Actually, it was about a year ago when we thought how can we help our printers to get the new thinking in a way and I was disturbed or annoyed about a lot of so-called research that says what people think and what people like. Research says that people like to read printed newspapers and printed brochures or such, but then the advertisers say that you have to be able to measure everything, and in the Internet world you can measure the clicks, which just tells you about the clicks, but not about how much you create business. So, I asked the professor in Sales and Marketing, he works at Helsinki University and Aalto University as a professor. He is Petri Parvinen and he is a guy under 40 years old, he was I think one of the youngest professors and the first professor dedicated in Sales. Usually in the universities they are Marketing professors but he specialized in Sales. So, I contacted Petri and said: “Would you be interested to do a research project on how investments in different marketing channels create business?”, and he immediately said: “Yes, this is a good idea!”, and he said that it’s really something that hasn’t been really made very much research on. Of course, we took a risk there because we just believed in print, but we didn’t know are we really right, but luckily the results are very good. If I tell a little more about the research, they succeeded to involve three quite big companies that are doing business to consumer marketing and they specified very detailed data about the different marketing actions, ads and then also how that created sales. For example, one of the companies is a department store specializing in furniture and they publish a very high quality catalog on furniture and living and such twice a year, and they could notice, if I don’t remember wrong, that the average case when a family came and bought something from them was that they spent I think 1,300 euros, and when the catalog was published it rose to 1,600 euros, so they could clearly see that the catalog has a very good influence on their business.
Really, what we are doing, we are organizing sessions where Petri is coming and tell the sales guys of our member companies about the results of this and we have made a leaflet kind of and also Power Point presentations how they can use and tell that this kind of research has been done – These are the results and you can do it also and benefit by using print. This is the idea and in the autumn we will organize a roadshow. We will go to five different major cities around Finland where our member companies can invite their customers to listen to Petri who is telling about the results of the research, so in this way we are trying to get more print business for our member companies. Also it’s really very nice that in parallel other project started here in Finland. It was a kind of research, or looking at different research projects in there and putting that together about how Finns are our marketing, how much money is spent on marketing in Finland per copy compared to other countries and there is also clearly seen that Finns are not good, Finnish companies are not good on that and it’s the Finnish marketing organization who is very highly sponsoring this project, and they are talking about the same things actually; not of course saying that it has to be on the print channel, but I think more marketing altogether will create better business and really put Finland in a better situation than we are right now.
Yes, certainly the industry’s changing really very much, or the demands for the industry and this is a challenge for us, how can we really go with that message and of course first we have to understand the message ourselves, but then give this information to our member companies and really in a positive and deep way get the printing industry, the printing companies to adapt to the change.
Yes, international competition is really an interesting topic. We used to be quite strong in exports of print. In around a year 2000, I remember the value of the Finnish export was around €300 million, whereas today it’s approaching 100, so it’s a radical drop and there are really a couple of reasons to this, that is of course that the demand of print has gone down also in the countries where we exported to. Russia used to be a very strong exporting country, Sweden has always been or almost always, one year Russia was bigger than Sweden, but usually Sweden has been our biggest export country, and Russia close to Sweden, but the economic crisis hit Russia even harder than in other countries and that had a clear effect on the Finnish print export; also the import of Baltic printed products has increased. I think the book publishers have been the most active of looking at possibilities to buy elsewhere, and there are a couple of very tough book printers in the Baltic countries that are all selling to Finland also.
Yes, they are – of course Vistaprint has been here for some time, but now also Flyeralarm has a finished website, but I don’t think the volumes are still very big. I think they have had a more an effect on the price awareness. People are checking about what would be the price if they would buy from a German online printer and then they are coming to the local printer saying: “Hey, this is how much it should cost”. In a way it’s good for the Finnish printers to notice that someone can do it much, much cheaper and I hope they start to think how should we change to be able to do it in the same way.
We have one interesting company here in Finland which unfortunately is not our member company. They came from copying business and this kind of business and have really done a great, successful job. First they started to buy local copy shop digital printing companies, and then also they bought one initially a repro company that was very much market-oriented and market-focused, and their way of working was to be more a consultant for the customer than a repro house or a printer and this knowledge and this behavior has I think quite well spread all over this company, which now employs some I think roughly 500 people, or something like that.
I think there will be a continuous change, but I think and hope that the radical drop in volume will at least slow down and we will see, or already we have seen something else of people starting to think that print is still a very good medium. I’ve been talking many times with different people about it, especially discussing with those that think that you don’t need print, you don’t need any more to subscribe for a newspaper, get your daily printed newspaper, and I’ve said: “Have you thought what you buy when you subscribe for a newspaper? You buy the service of an editorial team that makes a package for you of things that are good to know. If you just go to the Net, you look at those things that you’re interested in, and then your view of the world is much narrower than if you subscribe for the newspaper”. And I think there are some signals of people starting to understand that you can’t live only with the information you get from the Internet, which hopefully will lead to a situation that there is also a clear demand for print in the future. Certainly, the volumes will be smaller and I really hope that we will get a stronger consolidation here in Finland to get the few of stronger printing companies that can specialize in things and being more competitive. By the situation of having a lot of small ones they simply can’t be as competitive as needed in today’s world.