Growth Planning in the 3D Printing Sector - ABC Company - Case Study Example

Growth Planning in the 3D Printing Sector: The Case of ABC Company Name Tutor Course Institution Date Growth Planning in the 3D Printing Sector: The Case of ABC Company Literature Review Introduction Similar to the evolution of the internet in information, 3D printing is increasingly revolutionizing the manufacturing industry (Pierrakakis et al, 2014). The technology has been fully deployed by many industries, with studies being conducted on how effective it can be used, its effects as well as how the technology has grown. With the growth of this technology, there’s an increasing need to study the marketing strategy for the technology to be used by various industries. The present paper is a literature review of the growth and marketing of 3D printing. This review shall be used in developing a growth and marketing strategy for ABC Company. This shall be achieved through critical appraisal of the growth and market areas in the 3D printing technology, analysis of the business environment of the technology as well as its associated services. The review shall investigate how a new 3D printing startup business can be done. It shall also examine the technological barriers to its entry to the market. To enhance the marketing of the business, the review shall examine internet sales, marketing, branding and distribution channel for the 3D Printing business as well as investigate the pricing strategy to be used when getting to a new market. The definition of 3D printing has been investigated by various literature sources. While the definitions have varied from source to source, the common agreement has been that 3D Printing involves downloading a blueprint to a printer that can print three dimensional objects that aresophisticated by following an additive process that involves printing layers of a material (Marcoux and Bonin, 2012). In essence, the technology involves fabrication of objects. According to Bradshaw et al (2010), fabrication of objects was distinguished into three fundamental methods. These include cutting of the object off a block of a material, creating a mold then filling the mold so as to create the object and combining shapes together so as to make an object. The technology of 3D Printing falls into the third category of fabricating objects. This is the part where moving parts are created, including those that cannot be created using the two other methods. The actual production in 3D Printing has some considerable diversity. In a research by Wiegler (2008), some researchers were quoted to have felt that 3D printing should have been reserved for the specific technique that was created by Zcorp, a company that has been credited for creating a 3D printing technique that is cheaper. This involves use of a nozzle like a glue gun in printing objects. Other researchers were quoted to have believed that the term should have been used generically so as to include any type of additive manufacturing. This is because it can be easily understood by the public when used this way (Wiegler, 2008). The review in this paper adopts the concept of 3D printing as a method that encompasses any technique that will lead to printing of a three dimensional object. This is the main concept behind 3D printing, according to Wiegler (2008). The growth of 3D printing technology has been astonishing. The market size, including sales of 3D printers, its materials as well as associated services was reported to have reach $2.5 billion globally in 2013. In 2014, Canalys (2014) projects that this growth will hit $ 3.8 billion while Forbes (2014) projects a similar growth by 2016. The prospects of growth in the 3D printing business are highly attractive. This is because of the numerous advantages of the technology. The advances in this technology have ensured that the time taken in printing is faster and that objects can be printed by combining various materials, colors and various finishes. In addition, the prices are fast falling, making this technology a feasible option for various enterprises and consumer use. The only restriction is the competency in computer aided design and the availability of a printer. Both of these are set to demonstrate significant improvements. Owing to the significant developments in the technology, entry to the business presents a great opportunity for any business to develop and explore the market and the technology (Dunford, 1990). The main motivation behind starting up a 3D printing business should be innovation. This is because the business involves innovation of new product as well as continuous development and advancement of existing products so as to improve them continuously. In a report in the Businessdaily (2014), it was reported that 3D printing is a business that is highly customizable. This is a business that depends on the demand of the customers, based on their specifications from their products. This is the reason that the business requires innovation so as to meet up to the demands of the client and provide clients with solutions to problems on their products. Starting up the business requires the knowledge of computer aided design, as well as existence of a printer. In addition, it also requires that the provider has competent manpower that will match up to the requirements of the client and the competition from other 3D printing companies. Just like the internet in information, there are lots of opportunities to be explored by the 3D printing technology (Fenner, 2002). In addition, the technology keeps advancing, calling for the need to keep abreast with the changing and advancing technology (Campbell et al, 2011). While the technology provides attractive prospects for venturing into the 3D printing business, there are some barriers that have to be faced and overcome. Technology has proven to be one of the main barriers for entry into the business. According to Lipson and Kurman (2010), 3D printing is a fully technological business that requires technological competency for it to be used successfully. This implies that the business requires competency in platforms that shall make production successful. However, Lipson and Kurman (2010) added that this barrier has been overcome with the development of software such as computer aided design which is cheaper and easily accessible. These have made it easier for design of products to be developed using the 3D printers. Various authors agree that using 3D scanners which have basic cameras with software that is freely provided, instead of commercial systems, has made it easy to obtain digital data of objects that are in existent (Weinberg, 2010, Seulin et al, 2006, Anderson, 2007). Another technological challenge that needs to be overcome is that of software automation (Venturebeat, 2013). Today, the design of most objects printed in 3D is done by hand. There is a lack of consumers who have the ability to make their 3D designs by using software. There is a general rally to make it easier to get the designs. This implies that getting designs is still a challenge that is faced by the 3D printing industry. While some companies try to adopt use of scanners to get their designs digital, the original designs are still not easy to make automatically. Chupka (2013) stated that there is a growing need to develop scanning techniques that are easier so as to be used in making digital data of the designs. Another barrier to entry into this business is the labor force experience. The mainstream awareness of this technology is still very new. This implies that there is still little formal education on the subject. The total pool of expertise that is required to get a whole economy onboard with 3D printing is not available. This portrays the importance of having a competent workforce for the 3D printing to be successful. The growth seen in this industry has attracted many people into venturing into the technology and this implies that the challenge of labor force shortage is slowly being eliminated (Campbell et al, 2011). The growth of 3D printing has seen with it the growth of sales for 3D printers. According to Knapp (2014), the sale of 3D printers has grown rapidly. In a report by Wohlers Associates, there were 348 3D metal printers that were sold in the year 2013. This was a 75.8% increase compared to 2012. Most of the buyers are reported to be in the dental, medical and aerospace industries. The sale of 3D printers through the internet is still in the development stage. Various companies such as Ponoko and Amazon sell these printers online (3ders, 2014). However, the products of 3D printing are well known in the online market. For instance, Amazon has a 3D printing store where 3D printed products are sold (Amazon, 2014). This makes it easy to make sales of 3D printed products online. When the products are designed and developed, they can be availed online with their specifications. Clients can then examine them (Jordana &Levi, 2004). In addition, clients can make orders for these products online. The specifications for the products shall be used by the developing company in developing the required product by the client. A variety of already produced products are available online for potential clients to see and make orders. Changes on the products or modifications can be channeled to the producer so as to make products that best suit the needs of the clients. The online platform provides a feature for clients to upload their own design, as well as give specifications and request the producer to design for them. Over the past three years, internet sales of 3D printed products have grown at the same rate as the development of online sales. As the number of online selling companies grows, producers of 3D printed products liaise with the online sales companies in promoting their products and providing the sales services to clients (Ratto & Ree, 2012). In a recent study by Clinch (2014), companies that specialize in 3D printing were branded as the most hideous stocks. The projected growth in sales of 3D printed products by 500 % in five years is appealing to every 3D product marketer. This is because it is an indicator that the products are foreseen to be more and more accepted in the coming years. In fact, the technology of 3D printing has been a revolution in marketing itself (Diaz, 2013). Diaz further noted that companies and clients have incorporated 3D printing into their branding efforts in many ways. Companies like Coca Cola, Ebay, Nokia and Volkswagen have made great use of the technology for marketing their products. This implies that the relation between marketing and 3D printing is an automatic relationship. For a startup 3D printing company, marketing its products shall be as easy as developing the products and using the same technology in marketing the products (Susson, 2013). Marketing of 3D printed products involves targeting the main consumers of these products. In recent developments, various industries have adopted the use of 3D printed products. Industries such as aerospace industries have increasingly turned to the use of 3D printed products for developing their products. For instance, the Boeing 787 Dreamliner has made use of 3D printed products in its development. The Airbus also announced in 2013 that it intends to make use of 3D printed products in developing its next aircraft owing to its light weight and strength (Munoz et al, 2013). Another growing market is the health sector. This is because 3D printing is capable of replicating the human body more accurately as compared to the traditional forms of manufacturing. This can be used in developing products such as hearing aids, dental implants as well as orthopedics. In fact, research by IBISWorld (2013) estimated that by 2013, there were already over half a million dental implants made of 3D printing across the world. Already, there is ongoing research on the possibility bio-printing live tissue and cells. In the consumer market, it has been predicted that the consumer market will experience the biggest growth in 3D printing (Smock, 2010). This has been forecasted to even outpace the enterprise market over the short term (Munoz et al, 2013). This development is dependent upon the development of an application that shall compel consumers to embrace this technology. This refers to a killer application that will ensure reduced prices as well as ensure the era of self-production is brought into homes. In a report by Deloitte (2013), it was reported that commercial users will be the main revenue generators for 3D printing. This is a shift from the past where only large manufacturers such as Ford, Microsoft and 3m had the capacity to invest in the technology. The main marketing strategy for this business therefore involves use of a product mix approach. This is where the product is developed to suit a particular consumer. The strategy also involves custom designed products that depend on the specifications of the consumer. This implies that the company gets the specifications from the client and the designs or develops the products based on the specifications provided by the client. While the technology is sophisticated, marketing of products is purely dependent on the products developed. It also implies that the products have the ability to market themselves, through a market push strategy. This is where consumers are compelled into purchasing the products from the producer. The compelling force comes from the functionality of the product, and the demand that the client sees as the need for the product. A market pull strategy is used to custom design the products for clients (Corniani, 2008). Branding of 3D products will be the main drive behind the innovation of companies. It is through the products produced that 3D printing companies are able to be identified (Dempski and Webb, 2013). While there are custom designed products, mass production has been projected to be the main activity in 3D printing. But it is through the custom designed products that brand loyalty can be driven. Brand loyalty has been identified as a key drive to ensuring the sustainability of any business (Torres-Moraga et al, 2008). The success of any company depends on its ability to retain its current customers. It is the same customers that can be used to attract new customers through reference. As was noted by Martisiute et al (2010), brand loyalty is enhanced through customer loyalty. The efforts of the company should be channeled towards attracting new customers, satisfying them and retaining them. This calls for the need to understand what affects the satisfaction of customers and what determines their decision to choose certain products. The brand of the company has a great impact on the satisfaction of the customer. Recent research has pointed out that the impact of brand on customer satisfaction is an important marketing aspect. In a model developed by Hong-Youl et al (2009), it was shown that that the product and company’s brand drive the type of service offered to customers. This in turn drives the level of satisfaction attained by consumers and as a result, customer loyalty is established. The brand value of the company depends on the service offered, the image of the company, the price of products as well as the quality of service and products offered to consumers (Trasoras et al, 2008). The development of products using 3D printing technology is mostly based on custom designed products (Hippel, 2005). This provides a great opportunity for the companies to establish their brands through these products. In addition, it enables the company to fight for customer retention by always providing the solution to the problems faced by the client. Another challenge that the new 3D printing business shall face is the challenge of pricing its products (Ashford et al, 2011). The price of products plays a role in customer retention. Smith (2011) noted that the price given to a product should be the value obtained by the firm from the product while ensuring a mutual benefit between the firm and its clients. Since the company exists to provide value to its clients in exchange for a price, the price should favor both parties. Setting the right price should be based on information on the market price of the product. This implies that production of the product should be optimal; ensuring that the price of the product does not overshot the market price. For new products in the market, it is essential to consider an optimal price, factoring in all parameters, including production costs among others. Jensen (2013) reported that picking the right position of the product in the market price is essential. It involves penetration pricing, where the price is lower than that of competitors or competitive pricing, where the price is the same as that of competitors. In some instances, it involves skimming pricing where the price is higher than that of competitors. The distribution of 3D printed products was stated to be changing the normal product distribution where the design will just be downloaded and printed. However, 3ders (2013) noted that this shall be the case in the far future. According to Ramachandran and Ramanan (2005), the process of distribution should follow the rules of good marketing. This implies that it has to satisfy the customers. It should also be able to establish a predictable and stable market for the product. Those who take part in the distribution process must obtain an optimum margin. The future of distribution for 3D printing is set to be different from the conventional ways of distribution. However, before then, distribution of 3D printed products should follow the conventional product distribution methods. Conclusion 3D printing is a technology that has been fast developing. Just like the internet, it is revolutionizing the manufacturing industry and making it possible to have custom designed products at a fast speed and at the convenience of the consumer. The technology is still set to grow in sales and use of the products (Ringdahl, 2009). Further research on possible products that can be developed using the technology is still ongoing and this implies that the technology still has room for growth and development. In fact, the technology has been stated to have brought the future closer. Development of a new business into the industry provides prospects for growth because the technology is fast growing and fast transforming the manufacturing industry (Ellerin, 2004). Bibliography Amazon, 2014, Introducting Amazon’s 3D printing Store: Shopping the future, Retrieved on August 1, 2014 from: http://www.amazon.com/b?node=8323871011. Anderson, A., 2007, “A Whole New Dimension: Rich Homes Can Afford 3D Printers,” The Economist, November 15, Retrieved on August 1, 2014 from: http://www.economist.com/node/10105016?story_id=10105016 Ashford, N., Hall, R., and Pierrakakis, K., 2011, “Economic development and prosperity: Current Theory and Debate,” in Ashford, N., Hall, R., Technology, Globalization and Sustainable Development, Yale University Press, USA. Bradshaw, S., Bower, A. and P. Haufe, 2010, “The Intellectual Property Implications of Low-cost 3D Printing,” SCRIPTED, vol. 7, (1), pp. 5-31. Campbell, T., Williams, C., Ivanova, O., Garrett, B., 2011, Could 3D Printing Change the World? Technologies, Potential and Implications of Additive Manufacturing, Strategic Foresight Report, Atlantic Council. Canalys, 2014, 3D printing Market to grow to $16.2 billion in 2018, Accessed on August 1, 2014 from: http://www.canalys.com/newsroom/3d-printing-market-grow-us162-billion-2018. Chupka, K., 2013, With 3D Printing, the future is Now, retrieved on August 1, 2014 from: http://finance.yahoo.com/news/with-3d-printing--the-future-is-now-213431879.html. Clinch, M. 2014, 3-D printing market to grow 500% in 5 years, Retrieved on August 1, 2014 from: http://www.cnbc.com/id/101542669#. Corniani, M., 2008, “Push and Pull Policy in Market-Driven Management,” SYMPHONYA Emerging Issues in Management, no. 1, pp. 45-64. Deloitte LLP, 2013, Disruptive manufacturing: The effects of 3D printing. Dempski, K and Webb, S. 2013, Making Business Sense of 3D Printing Technology Jump Starts Opportunities for Mass Customization, On-Demand Production and Long-Tail Support, US: Accenture Technology Labs. Diaz, A. 2013, How Coke, VW, Nokia and Others Use 3D Printing in Marketing Technology Brings a New Dimension to Clients' Promotional Activities, Retrieved on August 1, 2014 from: http://adage.com/article/news/3d-printing-adds-dimension-marketing/243870/ Dunford, M., 1990, “Theories of Regulation, Environment and Planning,” D: Society and Space, Vol. 8, No. 3, pp. 297-321. Ellerin, S., 2004, “The Art and Science of 3D Printing,” Emedia, Vol. 17, No. (5), pp. 14-15. Fenner, A., 2002,“Placing Value on Information,” Library Philosophy and Practice, vol. 4, no. 2, pp. 1-6. Forbes, 2014, 3D Printing Industry Will Reach $3.1 Billion Worldwide by 2016, Accessed on August 1, 2014, from: http://www.forbes.com/sites/tjmccue/2012/03/27/3d-printing-industry-will-reach-3-1-billion-worldwide-by-2016/. Hippel, E. 2005,Democratizing Innovation, Cambridge, MA: MIT Press. Hong-Youl H., Chuncheon, Swinder J., Sang-Kyu, P. 2009,“Role of Satisfaction in an Integrative Model of Brand Loyalty: Evidence from China and South Korea,”International Marketing Review, 26, 2: 198-220. IBISWorld, 2013, 3D Printing & rapid prototyping services in the US,IBISWorld Inc. Jensen, M. 2013, Setting Profitable Prices: A Step by Step Guide to Pricing Strategy Without Hiring A Consultant, USA: John Willey and Sons. Jordana, J., Levi-Faur, D., 2004, The Politics of Regulation in the Age of Governance, pp. 1-28, 2004. Knapp, A. 2014, Sales Of 3D Metal Printers Grew Over 75% In 2013, Retrieved on August 1, 2014 from: http://www.forbes.com/sites/alexknapp/2014/05/21/sales-of-3d-metal-printers-grew-over-75-in-2013/. Lipson H. and Kurman, M. 2010, Factory at Home: The Emerging Economy of Personal Manufacturing, Washington: U.S. Office of Science and Technology. Marcoux, J. and Bonin, K., 2012, “Three Dimensional Printing: An introduction for Information Professionals,” ICDS 2012 : The Sixth International Conference on Digital Society, pp. 54-58. Munoz, C., Kim, C. and Armstrong, L., 2013, Layer-by-Layer: Opportunities in 3D printing Technology trends, growth drivers and the emergence of innovative applications in 3D printing, US: MaRS Discovery District. Martisiute, S., Vilutyte and Dainora, G. 2010, “Product or Brand?How Interelationship between Customer Satisfaction and Customer Loyalty Work,” European Journal of Interdisciplinary Studies, Vol. 2, Iss. 1, pp. 5-15. Pierrakakis, K., Kandias, M., Gritzali, C and Gritzalis, D. 2014, 3D Printing and its Regulation Dynamics: The World in Front of a Paradigm Shift, UK: University of Oxford. Ramachandran, S. and Ramanan, C., 2005, Distribution and Sales Management, New Delhi: Allied Publishers. Ratto, M. andRee, R., 2012, “Materializing information: 3D printing and social change”, First Monday, Vol. 17, No. 7. Ringdahl, T., 2009, “3d Printer Lets Designers Run with Shoe Design,” Machine Design.com, March 19, pp. 58-59. Seulin, R., Stolz C., Fofi, D., Million, G. and Nicolier, F., 2006, “ Three Dimensional Tools for Analysis and Conservation of Ancient Wooden Stamps,” Imaging Science Journal, vol. 54, pp. 111-121. Susson, M., 2013, Watch the World “Burn”: Copyright, Micropatent and the Emergence of 3D Printing, Social Science Research Network. Smith, T., 2011, Pricing Strategy: Setting Price Levels, Managing Price Discounts and Establishing Price Structures, UK: Cengage Learning. Smock, D., 2010, “Lower Prices Drive 3-D Printer Market”, Design News, May Issue. Tores-Moraga, E., Vasquez-Paraga, A.Z., Zamora-Gonza’lez, J. 2008, “Customer Satisfaction and Loyalty: Start with the Product, Culminate with the Brand,”Journal of Consumer Marketing, 25, 5: 302–313. Trasoras, R., Weinstein, A.and Abrat, R. 2009,“Value, Satisfaction, Loyalty and Retention in Professional Services,”Marketing Inteligence& Planning, 27, 5: 615-632. VentureBeat, 2013, The latest threat to 3D printing: Stupid, Broad Patents, Retrieved on August 1, 2014 from: http://venturebeat.com/2013/03/26/3d-printing-watch-for-patent-trolls/ Weinberg, M. 2010, “It Will Be Awesome if They Don't Screw It Up: 3D Printing, Intellectual Property, and the Fight Over the Next Great Disruptive Technology,” Public Knowledge, November, pp. 1-15. Wiegler, L. 2008, “Jumping Off the Page,” Engineering & Technology, Vol. 3, No. (1), pp. 24-26. 3ders, 2014, 3D Print Services- Online 3D Printing, retrieved on August 1, 2014 from: http://www.3ders.org/3d-printing/3d-print-services.html. 3der, 2013, Amazon CEO: 3D printing will not Change the Distribution of Products Anytime Soon, Retrieved on August 1, 2014 from: http://www.3ders.org/articles/20130525-amazon-ceo-3d-printing-will-not-change-the-distribution-of-products-anytime-soon.html. Read More