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 user 2006-11-15 at 12:57:00 pm Views: 61
  • #17271

    Printer Usage: The Essential Ingredient in Printer Vendor Profitability
    Why Usage Is Sending Some Vendors to the Bank,and Others to the Grave
    no secret that printing vendors make a vast majority of their profits
    from post-sale products such as ink, toner and paper. However, more
    often than not, vendors sell printers to people who simply don’t print
    at robust enough Average Monthly Page Volumes (AMPV) to drive supplies
    sales enough to make the relationship profitable for the vendor. As
    consolidation rumors continue to run rampant throughout the industry,
    and as most vendors once again post unimpressive quarterly financial
    results, Current Analysis has completed a study designed to find out
    more about the printing habits of the industry’s great unknown: SOHO
    and SMB users. While these customers present a large and growing
    opportunity, the segment has been marred over the past three years by
    price cuts of over 50% for some SKUs in low to mid-range printer
    categories. These hardware pricing challenges are breaking the backs of
    many indust! ry vendors. In this new competitive environment, it is no
    longer good enough to sell a printer to anyone; now, vendors must sell
    that printer to the right customer. Our study shows that there are
    specific higher-usage customers, and that there are a variety of
    variables which alter usage patterns.

    Study Overview
    Analysis surveyed over 500 users of monochrome and color
    single-function page printers to find out, simply put, who prints and
    who doesn’t. We did not rely on users knowing their usage history;
    rather, each respondent provided printer statistics straight from the
    unit’s on-board status reports to get an accurate picture of usage
    history. We then asked the respondents a variety of questions to get an
    understanding of the variables that affect usage behavior. Printers
    were broken into four categories: Color Low for products priced under
    $500, Color High for those products priced at $500 and above,
    Monochrome Low for products priced less than $250, and Monochrome High
    for products priced for $250 and higher..We found out that usage trends
    differ significantly depending on a vast amount of variables: where the
    printer was purchased, where the printer is located, which
    specifications alter usage, how many people utilize the printer, how
    different applications affect usage, how consumables buying trends are
    affected by usage, and more. The results shed light on the most
    important topic confounding printer vendors today: Which is the correct
    target audience for page printer products

    A Factor in Usage Differences
    we found that many different characteristics drive higher usage
    patters, one of the most dynamic aspects of usage behavior that drives
    higher usage is the location of the printer (office vs. home
    environments). We asked our respondents to first identify the brand and
    model of the printer they use. Answers ranged from color page printer
    products from HP, Dell and others, to monochrome products sold by
    leading suppliers, such as Lexmark, HP, and Brother. We expected to
    find that the location of the printer was a major driver of increased
    usage, but the findings of our study showed an even wider difference in
    usage by location than expected.Respondents that reported they use a
    color page printer and stated that their printer is located in a home
    office, as opposed to a business office, printed 73% fewer pages per
    month, on average, than respondents that indicated that the printer is
    located in a business setting. Monochrome respondents reported 70% less
    usage, on average, in home environments than in business environments.
    While it’s no surprise that office users outpace home users in usage,
    the large difference in AMPVs is notable.The office/home disparity gets
    even larger when looking at the difference between products in the low
    categorizations, versus those in the high categorizations. The greatest
    disparity was revealed in the Monochrome Low section. Monochrome
    printers purchased for less than $250 printed 918 more pages per month
    on average when placed in an office than they did when located in a
    home environment.When examining this behavior trend over one year’s
    time, we see that placing a low-end monochrome printer in a business
    environment can increase usage by over 11,000 pages. From a consumables
    perspective, the average toner yield in a monochrome low printer is
    4,150 pages with pricing averaging $91. Therefore, a low-end monochrome
    printer in a business setting will average 2.6 times more in dollars
    spent on toner purchases than will a low-end monochrome printer in a
    home environment, or an additional $200 or more in toner sales in the
    first year of ownership.The Monochrome High category also presented a
    significant difference in page volumes when home printers and business
    printers were compared. Monochrome High printers located in a home
    setting printed 54% fewer pages, on average, than monochrome high
    printers located in a business environment. Although this is still a
    very significant difference in page volumes, Monochrome High printers
    represented the lowest difference, in terms of percentage, between home
    and office settings of the subcategories in our study (i.e. Mono High,
    Mono Low, Color High, and Color Low). The other three sub-categories
    showed larger disparities in the usage patterns than Monochrome High in
    terms of location of the device. Monochrome Low, on the other hand,
    represented the largest difference between office and home page
    volumes, with Monochrome Low printers in an office printing over four
    times the amount of pages per month than Monochrome Low printers in a
    home.In the Monochrome High category, for which vendors’ stated average
    monthly duty cycles tend to bypass 100,000, it is clear that higher-end
    monochrome users are not even scratching the surface of their potential
    duty cycles. Our study showed that the average AMPV in the higher-end
    monochrome category was 1,114 pages per month and never exceeded 1,400
    pages per month in either an office or home setting. The same trend was
    found in the low-end monochrome category, for which vendors’ stated
    monthly duty cycles routinely eclipse 20,000; the AMPV of our
    respondents averaged 592, so it is easy to see that the industry is not
    designing products for average consumers. However, some have indeed
    recognized this trend and are lowering duty cycles and engine
    capabilities on newer units, thereby lowering manufacturing costs while
    still satisfying the needs of the end user.With discrepancies as much
    as 300% when simply looking at the differences between user volumes
    within an office environment and a home environment, it is easy to see
    why identifying and then specifically targeting users with high-usage
    profiles can translate into millions of dollars per year for vendors.
    One thing is clear: Vendors that are able to utilize distribution,
    pricing and promotion strategies to target only the most profitable end
    users, while at the same time cutting manufacturing costs on unneeded
    specifications, are clearly the ones most able to increase the
    effectiveness, and profitability, of each SKU in the marketplace. In
    these times of extreme pricing challenges, and the high cost of taking
    products to market, selling to the right customer can make all the
    difference in the future of a printing vendor