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Consolidation of Print and POSM procurement – opportunities and challenges

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by Raghuram Varadharajan
1 January 2017

The growth of digital and alternate channels of advertising such as apps, interactive websites, and social media platforms has stagnated the demand for traditional print marketing materials such as brochures and catalogues.

However, spend for promotional items and point of sale materials (POSM) has grown steadily over the years. Buyers have started to recognize potential opportunities to make cost savings by consolidating the demand in these categories.

Service providers also started to diversify their service portfolio to earn a fair share of the buyers’ spend. While a buyer can leverage the synergy between categories and identify opportunities for consolidation of sourcing requirements, there are challenges involved.

Service bundling:

The supply market for the print management services is extremely fragmented with local specialized suppliers and several global /regional players with extensive supply and distribution network. These sellers with their extensive network act as a one stop shop for the buyer and deliver an integrated solution across multiple regional markets. The local market knowledge, account management capabilities of the suppliers can help the buyer to engage in a strategic relationship and also mitigate the risks along the value chain of the goods. The service providers can also support the buyers in terms of tactical activities such as tendering, e-auctions, negotiations, purchase and delivery support. By leveraging on latest innovations in procurement such as online platforms, web portals and catalogue options, they help to consolidate the buyers’ purchase activity.

Supply base Consolidation:

Bundling of the requirements across categories can help buyers to consolidate their supply base significantly. In a consolidated approach, the buyers also have direct benefits such as improved bargaining power, complete visibility of the process, shorter lead times apart from soft benefits, higher degree of coordination and brand consistency.

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