Year: 2015

In the early 20th century, there were more than 500,000 rhinos living throughout Africa and Asia, but due to excessive poaching their numbers have dwindled to alarmingly low levels. In fact, according to recent figures published by Save the Rhino, there are now just 29,000 rhinos left living in the wild.

Rhino numbers have plummeted in recent years because of increased demand for their highly coveted horn, which can fetch up to $100,000 per kg (the average horn weighs between one and three kgs each) in countries like Vietnam and China. Users of rhino horn believe it to have medicinal value, capable of curing a variety of ailments ranging from headaches and hallucinations to snakebites and demonic possession – though there is no evidence supporting such claims.

Nevertheless, the rhino-poaching crisis has reached such levels as a result of increasing demand in Asia – driven by improved economic performance – that if the killing continues at the current rate, the number of deaths could overtake births as early as 2018. In fact, the problem has got so bad that biotech company Pembient has come up with a solution to the poaching crisis that is as controversial as it is clever – the manufacturing and distribution of synthetic rhino horn that is indistinguishable from the real thing. While it may sound like a brilliant solution to a seemingly impossible problem, the product has been met with scepticism from conservationists, who don’t believe it will reduce poaching of wild rhinos, but instead, drive up demand for the wild horn. But will this market-based solution manage to put a stop to poaching or exacerbate the situation further?

Convincing conservationists
Cathy Dean, the International Director of UK-based charity Save the Rhino, is adamant that the proposed solution will do more harm than good. For her, the fundamental problem with the synthetic products produced by Pembient – which include a skin cream marketed to wealthy women in Vietnam and a beer manufactured in China – is that it will drive up demand for wild horn.

“These are entirely new uses of rhino horn that will reach an entirely new audience”, she said. “We all know that Vietnamese and Chinese societies are now very aspirational. The real fear is that users will eventually graduate to wanting the real thing and that a wider demographic of people are being reached by these synthetic products.” In recent years, a large driver of demand for rhino horn has been the creation of new uses that have nothing to do with traditional Chinese medicine, which have been dreamed up and marketed by international criminal syndicates.

In Vietnam, which represents a burgeoning market for illegal rhino horn, it is viewed as a hangover cure and has been promoted as an effective treatment for cancer. But as rhino horns are entirely composed of Keratin (a protein found in hair and finger nails), such claims are fictitious. “Frankly, I struggle to see the difference between new uses touted by criminal gangs in order to create a wider market and drive up the price and those peddled by synthetic rhino horn manufacturers’”, added Dean.

If conservationists think that Pembient’s plan is to drive down demand then they are mistaken, because as the Seattle-based start-up’s CEO, Matthew Markus, explained: “I don’t really care about demand one-way or the other – I care about price. I care about animals and I don’t want them killed for products”, he said. “We are trying to prevent the farming of wildlife.” It might seem strange, but he is also concerned about protecting Vietnamese and Chinese cultural practices too, including those centred around the consumption of rhino horn.

One issue he has with traditional conservation organisations is that they set out to destroy these traditional practices, which in his opinion are what define cultures and make people unique. “Whether it is stopping rhino horn, ivory, shark-fin soup, bear bile or dog meat, I think you need to find a way to not set it up as a zero sum game, so that both sides are happy with the solution offered”, said Markus. “We kill 25 million animals per day in the US and nobody really holds us accountable for that. There are no NGOs from India showing up on our shores saying that the government needs to stop selling cheeseburgers.”

Market disruption
If Pembient plans to use its product to drive down market value of rhino horn, then it is important that it has an effective strategy for doing so. Arguably the easiest approach is to flood the market, drowning it with an excess amount of inventory for sale, leading to a rapid decline in price for the product. Such a plan is a little too simplistic for Markus and his team, who have instead chosen to attack the market from three different angles.

At the top end of the market, the company wants to create a legitimate brand. Pembient wants to sell a luxury product that will have true labelling, so people will know it came from a lab. It hopes that its synthetic rhino horn will be used in a number of products, particularly high-end ones, such as beauty creams, liquors, beers, and even durable goods including jewellery.

“We hope that it will find its ways into products where water buffalo horn is used as a substitute to real rhino horn, which is inferior to our product”, said Markus. “We hope to change rhino horn from being a fetishised product to being a sort of ‘mass-tiche’ goods that is available to the masses and, therefore, diminish some of the allure surrounding the rhino horn among these higher end consumers, while making a profit at the same time.”

From a middle market perspective, the US-based biotech company is fully aware that from time to time its product will be stolen or simply bought and re-labelled, perhaps even marketed as wild horn. Such activity will help to introduce a level of uncertainty into the market, making consumers of the commodity question whether or not they are actually buying wild or synthetic horn.

“Individuals in the middle of the supply chain are more motivated by profit than anything else, so our product can be seen as a universal cutting agent”, asserted Pembient’s CEO. “In the drug trade, you can think of a cutting agent as something that is less valuable and less efficacious as the drug being cut. In our case, we are the same as the cutting agent and we cost a lot less.

“So anyone using our product as a cutting agent will use it more and more in order to boost their profit margin until they wonder why they are even bothering with the real thing anymore.” At the lower end of the market, Pembient is hoping to inject a level of quality uncertainty into the market, so that people begin to question whether wild or synthetic horn is being traded in the black market. Markus and his team hope that over time all these different angles of attack will lead to the collapse of the black market and with it an end to poaching.

“We are also looking at staging intervention on the ground in South Africa from the supply side”, explained Markus. “This may be as simple as leaving [synthetic 3D-printed] horns in the field, so that poachers may stumble across them and pick them up and sell them instead of actually hunting the animal.” Considering that Pembient doesn’t care about demand and is solely focused on driving down the market value for wild horn in order to put an end to poaching, not only is its business model important, so too are pricing policies.

Building synthetic rhino horn in the lab is neither simple nor cheap, however, compared to the real thing it is. Wild horn on the black market can cost anywhere between $30,000 and $100,000 per kg.

That is why Pembient is targeting a wholesale price in the region of $7,000 per kg (about an eighth of the black market value), which it believe will allow them to drive down the wild horn’s market value while simultaneously making enough profit to keep the company afloat. “Ideally, we would like to be an ingredients company and sell this product as an ingredient to other producers to include in their end product”, noted Markus.

Answering critics
One of the major issues raised by conservationists regarding the sale of synthetic rhino horn has centred on its similarities to the real thing, which it says will create a number of legal challenges, especially when it comes to the import and export of the product. But when Markus was asked about the state of the company’s relationship with Chinese and Vietnamese authorities, he explained that things were running rather smoothly.

“That has actually been pretty easy”, he chuckled. “We had exported stuff to China for various tests. Most of this is based around documentation. We are the first people to categorise the contents of a horn, so the laws around wildlife traffic are very different to say drugs in as much as the composition of matter is less important than providence.”

The news may upset conservationists like Dean from Save the Rhino, who had hoped that the product would face some real obstacles, as in her opinion, “any company [that] starts manufacturing and marketing synthetic rhino horn does so to the detriment of the conservation movement”.

Such criticisms are welcomed by Markus, as the company relies on a critical eye in order to build for the future and acknowledges that the product will continually need to be refined over time in order to fulfil its goals. “We are always going to try and get better and better and get closer to being bio identical to real rhino horn”, he said. “One of our interim goals is basically to make it cost more to test our product than the real thing is currently worth.

“The idea is to make it impossible for an end consumer or a distributor or anybody else in the chain to be able to determine the quality of the good vis-à-vis wild horn.” The quicker the team can refine the process and create a product that is truly indistinguishable from the genuine article the better, as there is a concern that as genetic testing kits become cheaper more people will have the ability to verify products quickly and cheaply. Markus even envisages a world where one day consumers will have an app that is capable of telling them if they have real rhino horn or not.

“There are a lot of fakes in the market right now, but these are inferior fakes, so when technology is widely available to help in the identification process, I believe the fakes will be eliminated at an even faster clip”, he explained. “We think there is a need for someone to step in and fill that gap, because when there are no more fakes in the market, the demand for wild horn will be that much greater.”

Luckily, the team have already developed a number of prototypes, but are holding back on taking the product to market for the time being, pushing the launch of their product back to 2016.

When asked about the delay, Markus explained that the company had been in contact with a number of academics and economists who were eager to measure the impact of their synthetic product on the market, along with how effective it is at reducing incidents of poaching. The data is particularly important to Pembient, not just from a market research perspective, but also because the company believes that many conservation efforts in the past have failed to collect adequate levels of data or carry out secondary analysis.

“A lot of the time, it seems to be anecdotal evidence or good intentions are put forward as being the primary driver for some of these conservation behaviours, especially if you look at the crushing or burning of ivory”, said Markus. “I’ve asked several people within the conservation community why this is done and if there is any research that shows the impact of this practice on the end consumer or market price, but they can’t point to any reasons why it is done other than for tradition or because it sends a strong message.”

However, conservationists have been very successfully in driving down demand for wild horn in the past and continue to make progress.

“Nobody expects to snap their fingers and have the issue resolved overnight”, said Dean. “If it were a simple problem, believe me it would have been solved. It is complex. It is difficult. It does need a range of measures working in tandem.” For now at least, only time will tell if the proliferation of synthetic horn into the market will make the impact that Markus is hoping to achieve. It is also a shame that greater collaboration between Pembient and traditional conservationist organisations appears unworkable at this stage.

But considering that there is polarising opinion over how best to reduce demand for wild horn globally, with legalisation of the wild horn trade in South Africa likely to come up when The Convention on International Trade in Endangered Species of Wild Fauna and Flora convenes in 2016, it is unlikely that a consensus will be reached about the manufacturing of synthetic products any time soon either. But no matter what side of the synthetic fence individuals find themselves on, everyone must acknowledge that such an innovative attempt at a solution is worthy of praise.

For centuries, the printing industry flourished as consumers had increasingly more disposable income to spend on goods such as books and magazines. It was no coincidence that marketing became an integral aspect of business models, resulting in the proliferation of posters, leaflets, brochures, billboards and the like. While this was the case for the greater part of the 20th century, a throng of new challenges is permeating the print industry’s latest chapter.

Following the onset of the financial crisis and its subsequent long-term repercussions, advertising budgets were in many cases the first to face a trim. Magazines and newspapers, both large and small, have since contended with drastically reduced profit margins, while book publishers face their own myriad obstacles.

When the digital revolution first began making waves across the globe, the phrase ‘print is dead’ swept through the industry like a death sentence. Fresh content and breaking news became available at the touch of a button and if popular, reached the screens of millions within a matter of minutes. And as if the macroeconomic nuances were not enough to shake the industry (see Fig. 1), the internet has transformed consumer expectations, as well as the market itself. Nowadays, even with no training, anyone can conduct an effective marketing campaign. There are now countless possibilities for businesses to promote themselves at low or even zero cost, meaning that traditional platforms face considerable pressure to evolve, adapt or die.

Modern-day challenges
The printing industry plays a supporting role to every sector and market; all businesses, governmental bodies and educational enterprises require printed materials. As such, amid economic decline interlinked industries face proportionally bigger consequences than
their counterparts.

The result is far greater competition between printing firms, which is heightened further through globalised networks that can quickly locate the most cost-effective source.

“Companies are being forced to look at digital channels which can offer low unit cost communications. However, often these are not as effective and so a balance needs to be struck. More and more companies are realising the benefit of adapting multi-channel strategies, using a combination of traditional and digital print and e-delivery”, said Linda Bosch, Managing Director at MBA Group, a printing company that has evolved into a multi-channel communication business.

While the technology has developed, most notably from traditional press to inkjet printing that has enabled faster and cheaper production, the rate of global competition is too fierce to allow persistent price undercutting. Many have buckled, while others have compromised on quality. “It has put pressure on printers to be in tune with the world of IT and data management, and continuously keep abreast of new advancements”, Bosch told World Finance.

“This is not a small challenge for an industry that is multiple decades old. The investment in new technology and the ability to adapt to an ever-changing and challenged market has resulted in fewer traditional printers being available. It is practically unheard of for someone to set up business as a printer in today’s world.”

The primary function of printers has always been, and always will be, communication. Whether a message, story, a campaign, or an idea. Whereas historically this has been done via the printed word – the internet has brought forth new platforms for communication. As such, successful industry players are broadening their product offerings and portfolios considerably; not only do they provide the service of printing brochures, posters and books, they now offer creative solutions, consultancy services, project management and digital development. From website design to data management, traditional printers have placed themselves at the forefront of the communications industry.

They have become the one-stop shop for organisations, thereby allowing a multi-faceted, omni-channel communications approach. “Today, the various digital channels have brought the print industry opportunities, as opposed to threats. Printed communications are being integrated with digital mediums to provide a consistent brand experience centred on individual customers. It is like a partnership – you need both physical print and electronic communications to work together for them to be the most effective”, Bosch told World Finance.

The evolution of print
People are more in tune with marketing and advertising than ever before, and have a deeper understanding of what can be done, of what is already out there and the importance of standing out from the crowd. “Customers are a lot wiser nowadays, they are more aware of marketing techniques and increasingly expect their documents and communications to be unique to them as individuals”, said Jon Barratt, Marketing Manager at MBA Group.

This has made it necessary for printing firms to transition from a customer-driven to a customer-centric approach, meaning that not only must they provide for their clients’ communications needs, they have to know what these are before the customer knows themselves. As communication specialists, these firms have to stay ahead of the game in terms of the on going development of the digital world.

Most organisations are choosing to incorporate digital marketing in their strategies and are taking strides to broaden their online presence as they should – they would be foolish not to. The digital age is not a passing phase; it will continue to infiltrate more aspects of our lives and areas of business (see side bar). That being said, there is still a place for print – it has qualities that online counterparts can never have, by their very nature. “There is the tactility of print – one thing that digital has never really succeeded in replicating is the sensory experience, either replicating or providing an equally good alternative”, said Rob Orchard, Director of The Slow Journalism Company and Editorial Director of Delayed Gratification magazine.

Then there is permanence. Nowadays, content on the internet vanishes as fast as it appears. A swift scroll and its gone. Among the endless barrage of posts – in any format they happen to come in – it is increasingly difficult to see the wood from the trees, namely the valuable, interesting and informative from the time-wasters. Managing to catch consumer attention in a split second and then keeping it fixed is an unenviable task for marketing managers and individuals alike.

“If you want to stay on top of what’s happening, you could very easily spend every working hour of every day because there are live blogs updating from 10 different cities across the world at any one point. There are updates coming through from your favourite news resources straight to your phone, on Twitter, Facebook and RSS feeds. There’s a feeling of unmanageability, a feeling of this white noise of news media coming at you. And I think that print is a fantastic antidote for that because it is self contained, it’s limited and there is something quite comforting and calming about that”, said Orchard.

A book or a magazine has the lure of time. It’s content is unchanging and always accessible (unless physically discarded). It can sit on a shelf or in a study for months or years, tirelessly waiting to be devoured for the first or 100th time. “There is a permanence to print that digital doesn’t readily offer. I was told by a college student that ‘digital means impatient’, which I think refers to the impermanence of digital; once it’s off the screen, it’s out of sight in their minds”, said Gerald Richards, CEO of 826 National, a writing and publishing NGO based in the US. Consumers naturally spend more time reading the printed word than they do with digital content – taking their time to digest and understand, returning to the piece when necessary – simply, it holds their attention and is considered worthy of more time.

Publishers understand this crucial difference all too well and have adapted to it. As such, many publications now provide much more complex and involved offerings – writers have the opportunity to deeply explore a topic, rather than rapidly assimilate information about an event for online, while also catering to the SEO beast.

“Our slogan, which is on the spine of every magazine is, ‘last to breaking news’. It’s this idea of we’re not going to bring you the breaking story from Athens right now, but in three months time we are going to return to it with the benefit of hindsight and we’re going to give you an in depth look of how the situation has evolved over that period, which is going to give you a perspective that nobody else is in a beautiful print product”, added Orchard. And for writers, there is still something exciting about producing for print, for the same reasons as there have always been and even more so now because anyone can post online and publish their work to an audience.

Co-habitation possible
“The print industry is going through a continuous transformation. There is no end destination – it is a never ending journey that requires continuous energy to embrace new technology and ensure that we keep in tune with our client’s needs and their customer’s wants”, Bosch explained. There is so much that print can offer, both to those who produce it and those who consume it, and it is still a vital tool in advertising.

In the practical sense, it offers information that is permanent and finite, and does not need electricity to be read. While the aesthetic value of printed materials means that they can decorate a home, an office or even a city. “There’s actually loads of ways that print is superior to digital and I think that the pendulum has really swung back a lot”, said Orchard.

Digital media on the other hand offers something very exciting – something that was never before possible. It gives every individual and organisation, no matter who they are, where they are, or how influential they are, a voice – one that can captivate millions and spread like wildfire across the entire world. It allows information and news to travel faster than ever before, enabling people to share and learn more than they could ever dream of prior to the internet. It’s a tool that can save lives and has changed the world.

The two worlds can live together symbiotically. Consumers enjoy, benefit and learn from both, while organisations can employ each for different reasons. Print and digital mediums can complement one another – technology doesn’t have to be a threat, but an opportunity. Each medium has its own merits and benefits, as well as its flaws; but where one fails, the other has in abundance.