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Marketing Strategies, Functions, and Benefits of Forest Certification: A Cross-cultural Comparison. Toshiaki Owari, Ph.D. (The University of Tokyo, Japan). Certified Forests and Products 2007 (Kraxner et al., 2007). - PowerPoint PPT Presentation
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Marketing Strategies, Functions, and Benefits of Forest Certification: A Cross-cultural Comparison
Toshiaki Owari, Ph.D.
(The University of Tokyo, Japan)
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Certified Forests and Products 2007(Kraxner et al., 2007)
The area of certified forests worldwide totalled 294
million hectares, or about 7.6% of the world’s
forests.
The potential roundwood supply from the world’s
certified forests is estimated at approximately 387
million m3.
The number of CoC certificates totalled 8,600, of
which 63.4% were by FSC and 36.6% by PEFC.
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
The Market for Certified Forest Products
… may have a significant impact on business and p
olicy-making (Kraxner et al. 2005)
… is not well understood due to the absence of offici
al trade statistics (Rametsteiner et al. 2003)
Market actors and policy makers are hampered by l
ack of information (UNECE 2005)
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Motivation
We examined the role of forest certification in the Finnish wood products suppliers (Owari et al., 2006).
In a country with different certification schemes in operation, there may be different perceptions within companies about forest certification.
Further research should examine the situation in a number of different countries to reveal similarities and differences among them.
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Purpose
The purpose of this study was to compare the role
of forest certification in marketing between Nordic
Europe (Finland and Sweden) and Japan.
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Status of Forest Certification
Finland Sweden Japan
Certified forest (ha)
433,752 (FSC) 22,144,082 (PEFC)
11,233,982 (FSC) 7,047,960 (PEFC)
276,492 (FSC)
391,780 (SGEC)
Chain of custody certificates
21 (FSC)
107 (PEFC)
115 (FSC)
68 (PEFC)
490 (FSC)
25 (PEFC)
64 (SGEC)
FSC: Forest Stewardship Council
PEFC: Programme for the Endorsement of Forest Certification schemes
SGEC: Sustainable Green Ecosystem Council
(August 2007)
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Study Framework
Marketing strategies• Products• Customers• Market area• Competitive advantage
Marketing functions• Communication• Pricing
Supplier benefits• Business performance• Customer relations• Public relations
How important is certification for companies?
How do companies use certification in marketing?
What benefits have they gained from certification?
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Methods
A nationwide survey with standardized questionnaire scheme was used for each country.
Finland Personal interviews with 25 wood products companies in S
ep-Dec 2004 All having PEFC CoC, mainly small and medium sized
Sweden A self-administered electronic survey distributed to 149 co
mpanies in Dec 2004 (49 surveys undelivered) 27 usable responses by Mar 2005 (adj. resp. rate 27%) 70% having FSC CoC, 48% having PEFC CoC
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Methods
Japan A mail survey targeted 247 companies with FSC, PEFC, or
SGEC CoC in Oct. 2005
132 usable responses (adj. resp. rate 54%)
93% FSC CoC
52% from paper products, 48% from wood products
Non-response bias was examined using the extrapol
ation method and not considered a problem.
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Importance of Certification(Finland and Sweden)
2.0
2.7
3.0
3.2
3.2
3.3
3.6
3.6
3.6
3.9
2.3
3.0
3.0
3.1
3.2
3.4
3.6
3.6
3.7
3.9
1 2 3 4 5
Get a price premium
Differentiate the product
Exploit new markets/countries
Gain new customers
Create competitive advantage
Sell the product in the existing markets
Meet the customer requirements
Avoid losing competitiveness
Keep the market share/position
Communicate company’s sense of responsibility
Mean importance rating
Finland (n=25) Sweden (n=27)
Not at all important
Very important
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Importance of Certification (Japan)
2.3 (69)
3.4 (68)
3.5 (68)
3.9 (69)
4.3 (69)
3.8 (69)
3.7 (68)
3.6 (69)
3.9 (69)
3.6 (67)4.0 (61)
3.9 (61)
3.8 (61)
3.6 (62)
3.4 (61)
3.3 (62)
3.2 (61)
2.8 (60)
2.6 (61)
2.4 (61)
1 2 3 4 5
Get a price premium
Keep the market share/position
Sell the product in the existing markets
Avoid losing competitiveness
Meet the customer requirements
Create competitive advantage
Gain new customers
Exploit new markets
Differentiate the product
Communicate company’s sense of responsibility
Mean importance rating (number of samples)
Paper products companies Wood products companies
Not at all important
Very important
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Channels Used for Communication (Finland and Sweden)
2.0
1.8
2.4
2.8
2.4
3.8
3.6
2.9
3.7
3.9
1.8
1.9
2.1
2.3
2.5
2.8
2.8
3.0
3.3
3.4
1 2 3 4 5
Trade show and other event
Advertising to consumers
Advertising to industrial customers
Product catalogue
Annual report
Invoice
Company brochure
Environmental report
Internet web site
Personal communication with customers
Mean use rating
Finland n=25( ) Sweden n=27( )
Not used at all
Used very often
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Channels Used for Communication (Japan)
3.7 (67)
2.3 (66)
2.9 (67)
3.0 (67)
2.5 (67)
2.4 (66)
1.4 (67)
2.2 (67)
1.9 (66)
2.4 (66)
3.4 (54)
3.1 (57)
2.9 (57)
2.8 (57)
2.7 (53)
2.5 (53)
2.3 (55)
2.2 (55)
1.9 (54)
1.4 (50)
1 2 3 4 5
Environmental report
Annual report
Advertising to industrial customers
Advertising to consumers
Invoice
Product catalogue
Internet web site
Company brochure
Trade show and other event
Personal communication with customers
Mean use rating (number of samples)
Paper products companies Wood products companies
Not used at all
Used very often
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Price Premiums(Finland and Sweden)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Finlands (n=25) Sweden (n=27)
Per
cent
age
of r
espo
nden
ts
Premiumsnot received
Premiumsreceived
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Price Premiums (Japan)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Total (n=132) Paperproducts
companies(n=69)
Woodproducts
companies(n=63)
Per
cent
age
of r
espo
nden
ts
No answer
Premiumsnot received
Premiumsreceived
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Benefits of Certification(Finland and Sweden)
1.7
2.1
2.6
2.9
3.6
3.5
3.7
3.8
1.7
1.9
2.2
2.9
3.0
3.3
3.6
3.6
1 2 3 4 5
Higher profitability
An increase in sales volume
Gaining new customers
Acceptance from environmental groups
Good public reputation
More customer satisfaction
Keeping existing customers
Acceptance from environmentally sensitivecustomers
Mean benefit rating
Finland(n=25) Sweden (n=27)
No benefit at all
Very great benefit
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Benefits of Certification (Japan)
3.0 (65)
3.2 (64)
2.2 (63)
3.2 (66)
2.2 (66)
3.1 (66)
2.3 (66)
2.0 (66)
3.2 (59)
3.2 (59)
2.6 (57)
2.6 (60)
2.4 (58)
2.4 (59)
1.9 (59)
1.8 (59)
1 2 3 4 5
Higher profitability
An increase in sales volume
Keeping existing customers
Gaining new customers
More customer satisfaction
Acceptance from environmental groups
Acceptance from environmentally sensitive customers
Good public reputation
Mean benefit rating (number of samples)
Paper products companies Wood products companies
No benefit at all
Very great benefit
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Summary
Marketing strategies Certification as a reactive measure (Nordic Europe,
Japan-paper) Certification as a proactive measure (Japan-wood)
Marketing functions Communications did not actively use certification A price premium was not possible for most companies
Marketing benefits Certification improved customer/public relations Certification did not improve financial performance
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Discussion
Why did the Japanese wood products suppliers have a unique perception? Small forestry and wood industry companies proactively
introduced forest certification as a tool to differentiate themselves in the marketplace.
Is forest certification an effective marketing tool? In contrast to the original premise, forest certification may
compel suppliers, not consumers, to bear the cost of sustainable forest management.
Oct. 30, 2007 IUFRO All Division 5 Conference, Taipei (Owari, T.)
Acknowledgements
I thank Dr. Yoshihide Sawanobori and Mr. Tsutomu Ito for their assistance with data collection.
This study was conducted in part through the 2004-2005 Programme for the Promotion of Basic Measures in Forests and Forestry, sponsored by the Japan Forestry Agency.
This paper was partly supported by the Japan Forestry Agency, and the Ministry of Education, Culture, Sports, Science and Technology, Grant-in-Aid for Young Scientists (B), 18780108, 2007.