Observations: All Color All The Time?

by Jim Lyons

The Hard Copy Observer, January 2007

In last month’s column, I commented on the plummeting prices of color laser printers and argued that ever lower price points are not enough to change buying habits and that consumers and small businesses will only believe in the power of color laser printers if the industry shows them the way. I asserted that in-house marketing applications are a sweet spot for driving desktop color printing growth now that today’s more capable color laser printers can crank out original marketing materials and replace expensive outsourced color print jobs. The pitch that desktop color laser printer manufacturers are betting on is that color laser printers can actually save owners money and make life easier at the same time.

But what about the use of color in other printing applications? Will inexpensive color laser printers mean the demise of monochrome laser printers? Or are there some printing applications where black and white still makes sense? A recent Samsung marketing campaign proves there is still plenty of life left in monochrome printing, and the firm is focusing on a large and growing application where black-and-white printing makes a lot of sense—printing from the Internet.

A recent Samsung Internet advertisement, with a link from a major news network’s Web site on election night no less, touts the SCX-4200 as a "Samsung Home Internet Printer for under $150." The advertisement positions the SCX-4200, which is actually an MFP by Observer definitions, as a "cost-effective alternative to using a color printer and expensive cartridges on jobs that don’t require color, such as printing pages off the Internet."

Seeing Samsung’s advertisement for an Internet-specific printer brought me back to my work on defining and developing an Internet printer for HP over 10 years ago. However, truth be told, my company’s efforts back then were focused mostly on file formats and converting information from its Web presentation to an effective printed page. Samsung’s SCX-4200 advertisement seems to assume all those potential Web-to-print problems are solved (which is a reasonably safe assumption in 2007) and focuses instead squarely on the idea that customers do not need color when printing from the Web, so why pay for it?

A conversation with Tony Venice, senior solutions marketing manager for Samsung, shed some light on the advertisement and the underlying Internet-related positioning. Samsung research indicates that younger SCX-4200 users employ the product’s scanner to capture images for uploading to sites such as MySpace. In addition, Internet users print lots of Web pages, and most of that content (up to 80 percent) is either black-and-white already (text) or acceptable in monochrome (Web advertisements). Moreover, Venice believes that user sensitivity to the cost of color printing is growing, especially sensitivity to the high cost of color ink jet supplies.

Predictably, Samsung also positions its color laser printers as offering a cost-per-page (CPP) advantage compared with color ink jet printers. For example, the firm is aiming the Samsung CLP-300 and CLP-300N at the K-12 educational market by positioning these devices as ink jet printer replacements based on the color laser printers’ low hardware prices, small footprints, and economical CPP. The premise is that schools (or individual teachers) can make a relatively small hardware investment by replacing incumbent ink jet printers with low-cost color laser printers and see that investment pay off in far lower expenses for color supplies in the future, especially in the print-intensive but cost-sensitive world of education.

Of course, Samsung is relatively well positioned in the monochrome laser printer, monochrome laser MFP, and color laser printer markets but is a nonentity in the ink jet space. As a result, Samsung has a focused marketing campaign that allows it to aggressively promote a pro-laser/anti-ink jet message, and the firm seems intent on taking full advantage of its laser-only product portfolio.

There is at least some evidence that an "all color all the time" theme may be wearing thin. Two economists, Harvard’s David Laibson and MIT’s Xavier Gabaix, wrote an article on hidden fees, "Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets," that appeared in the Quarterly Journal of Economics and was fodder for a recent article written by Christopher Shea and posted on SFGate.com. In his article, "Living in a Hidden-Fee Economy," Shea lumps ink jet printers with cell phones, car rentals, and hotel bookings as products and services that are less-than-straightforward in their pricing, with unwitting consumers paying much more than they are led to believe upfront. Shea asks, "How many people realize, when they walk out of CompUSA, a nice $99 ink jet model tucked under their arm, that it’s likely they’ve just committed themselves to spending nearly $1,500 on ink cartridges over the next four years?"

While Shea’s estimates for the total cost of operation differ from those of Lyra Research, the study reflects consumers’ heightened awareness of CPP, which is sure to be a hot topic in 2007.