WOOD 465 Marketing 2012wood465-kozak.sites.olt.ubc.ca/files/2013/01/WOOD-465_Marketing_20… · WOOD 465 – Business Management in the Wood Industry Component #3 –Marketing Marketing

Marketing

WOOD 465 – Business Management in the Wood IndustryComponent #3 – Marketing

Marketing

What is marketing?


Marketing

• provide the customer with what they want and need• a business philosophy that requires:

complete customer orientation coordinated company commitment profit (not sales) as the objective

The marketing concept


Marketing

The marketing concept

environment

marketing research

marketing

company customer


Marketing

The 4 P’s

product place

customer

price promotion


Marketing

• a firm’s action on controllable variables to satisfy customer group(s)

high-end wood furniture for small urban living spaces a select line of furniture items with high design values and

functionality priced at a premium, sold in specialty retail outlets in the

downtown core advertised through architectural and lifestyle magazines, walk

by traffic, and word-of-mouth

The marketing mix

eg


Marketing

The 4 P’s

customer


Marketing

The customer

“A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him.He is not an interruption of our work. He is the purpose of it.He is not an outsider on our business. He is part of it.We are not doing him a favour by serving him.He is doing us a favour by giving us an opportunity to do so.”

- Mahatma Gandhi, 1890


Marketing

The customer (value chain)

Trees Sawmills

Pulp &Paper

ByProducts

PanelProducers

LumberProducts

Value AddedProducer

Dist

ribut

ion

Specifier

Retailer

End User

Builder


Marketing

The 4 P’s

product

customer


Marketing

• physical good or service that satisfies a customer’s wants and needs product levels: items, lines, mixes, bundles types of (forest) products: commodity, differentiated, specialty total product concept product life cycle

Product


Marketing

lumberpaper

furniturefruits and nuts

carbon

plywood

doors and windows

musical instruments

flooring

newsprint

oriented strandboard

recreation

toys

shakes and shinglesMSR lumber

decks

prefabricated homes

bioenergy

medicinal products

rayon

maple syrup

corks

pulp

firewood

ethanol

biofuels

pallets

charcoal

medium density fibreboard

ecotourism

cabinets

spices

bark mulch

rubber

florals

waxes

resins

turpentine

coated papers

packaging

fencing

oils

food additives

inks

cosmetics

methanol

nanocellulose fibers

types of (forest) products

Product


Marketing

lumberpaper


carbon

plywood

doors and windows

musical instruments

flooring

newsprint


recreation

toys


decks

prefabricated homes

bioenergy

medicinal products

rayon

maple syrup

corks

pulp

firewood

ethanol

biofuels

pallets

charcoal


ecotourism

cabinets

spices

bark mulch

rubber

florals

waxes

resins

turpentine

coated papers

packaging

fencing

oils

food additives

inks

cosmetics

methanol


commodity products

Product


Marketing

lumberpaper


carbon

plywood

doors and windows

musical instruments

flooring

newsprint


recreation

toys


decks

prefabricated homes

bioenergy

medicinal products

rayon

maple syrup

corks

pulp

firewood

ethanol

biofuels

pallets

charcoal


ecotourism

cabinets

spices

bark mulch

rubber

florals

waxes

resins

turpentine

coated papers

packaging

fencing

oils

food additives

inks

cosmetics

methanol


differentiated products

Product


Marketing

lumberpaper


carbon

plywood

doors and windows

musical instruments

flooring

newsprint


recreation

toys


decks

prefabricated homes

bioenergy

medicinal products

rayon

maple syrup

corks

pulp

firewood

ethanol

biofuels

pallets

charcoal


ecotourism

cabinets

spices

bark mulch

rubber

florals

waxes

resins

turpentine

coated papers

packaging

fencing

oils

food additives

inks

cosmetics

methanol


value-added products

Product


Marketing

lumberpaper


carbon

plywood

doors and windows

musical instruments

flooring

newsprint


recreation

toys


decks

prefabricated homes

bioenergy

medicinal products

rayon

maple syrup

corks

pulp

firewood

ethanol

biofuels

pallets

charcoal


ecotourism

cabinets

spices

bark mulch

rubber

florals

waxes

resins

turpentine

coated papers

packaging

fencing

oils

food additives

inks

cosmetics

methanol


innovative products

Product


Marketing

lumberpaper


carbon

plywood

doors and windows

musical instruments

flooring

newsprint


recreation

toys


decks

prefabricated homes

bioenergy

medicinal products

rayon

maple syrup

corks

pulp

firewood

ethanol

biofuels

pallets

charcoal


ecotourism

cabinets

spices

bark mulch

rubber

florals

waxes

resins

turpentine

coated papers

packaging

fencing

oils

food additives

inks

cosmetics

methanol


non-timber forest products

Product


Marketing

lumberpaper


carbon

plywood

doors and windows

musical instruments

flooring

newsprint


recreation

toys


decks

prefabricated homes

bioenergy

medicinal products

rayon

maple syrup

corks

pulp

firewood

ethanol

biofuels

pallets

charcoal


ecotourism

cabinets

spices

bark mulch

rubber

florals

waxes

resins

turpentine

coated papers

packaging

fencing

oils

food additives

inks

cosmetics

methanol


subsistence products

Product


Marketing

lumberpaper


carbon

plywood

doors and windows

musical instruments

flooring

newsprint


recreation

toys


decks

prefabricated homes

bioenergy

medicinal products

rayon

maple syrup

corks

pulp

firewood

ethanol

biofuels

pallets

charcoal


ecotourism

cabinets

spices

bark mulch

rubber

florals

waxes

resins

turpentine

coated papers

packaging

fencing

oils

food additives

inks

cosmetics

methanol


ecosystem services

Product


Marketing

Product

types of products

commodity products

differentiated products

specialtyproducts

natural evolution

product complexity, importance of marketing activities


Marketing

Product

product

reputation

credit

quality

warranty

style

reliability

service

total product concept


Marketing

Product

dimensionlumber


Marketing

Product product life cycle

Introduction Growth Maturity Decline

0

in $VALUE

TIME


Marketing

Product

Why is it critical to recognize where your product(s) lies on the product life cycle?


Marketing

Product

Introduction: Growth: Maturity: Decline:


Marketing

Product

source: adapted from Sinclair (1992)


Marketing

Product

The length of a product’s life cycle depends on what?


Marketing

Product

How can a product’s life cycle be extended?


Marketing

The 4 P’s

product place

customer


Marketing

• sometimes known as “distribution”, “logistics”, “supply chain management”

• all of the activities that get the right product to the right customer at the right time transportation methods packaging delivery times and locations inventories retail provision of services

Place

eg


Marketing

• supply chain (management) definitions: “A supply chain is a physical network of entities through which

materials, (directly, or via inventory), information, and cash flow. The supply chain starts with a raw material supplier and ends with the customer that consumes the products produced by the chain.”

“Supply chain management implies planning, development, coordination, organisation, steering, and control of intra and inter-organisational processes from a holistic perspective and accounting for exchanges of materials, information, cash, product development activities and marketing activities in supply chains.”

Place

source: Mattsson (2000, 1999)


Marketing

• supply chain (management):

Place

source: Vahid (2011)


Marketing

Place

system made up of independent institutions involved in moving products from points of production to points of consumption

source: Sinclair (1992)

channels of distribution:


Marketing

• channel strategies: sell direct to customers? which intermediaries should be used? agents versus merchants degree of channel ownership / integration? intensity / exclusivity of distribution? level of cooperation along supply chain? domestic or international markets? delivery times and locations? packaging and treatments? inventories? mode of transport? rail, truck, waterways, intermodal

Place


Marketing

• terms of delivery (INCOTERMS):

Place

Departure– EXW (Ex Works)

Main Carriage Unpaid– FCS (Free Carrier)– FAS (Free Alongside Ship)– FOB (Free On Board)

Main Carriage Paid– CFR (Cost & Freight)– CIF (Cost, Insurance & Freight)– CPT (Carriage Paid To)– CIP (Carriage & Insurance Paid To)

Arrival– DAF (Delivered at Frontier)– DES (Delivered Ex Ship)– DEQ (Delivered Ex Quay)– DDU (Delivered Duty Unpaid)– DDP (Delivery Duty Paid)

source: Juslin and Hansen (2011)


Marketing

Place

manufacturing

wholesalers distributors

industrial end-users

lumberyards

building and remodeling contractors

consumers and home owners

manufacturing

industrial end-users

pro-dealers

building and remodeling contractors

consumers and home owners

DIYretailers

productionbuilders

source: Poyry (2009)two-step supply chain one-step supply chain

wood industry trends


Marketing

The 4 P’s

product place

customer

price


Marketing

• amount charged for a good or service fixed costs variable costs taxes

profit margin

Price


Marketing

pricing models:• cost-based pricing• market share-based pricing (introductory pricing)• sales volume-based pricing• status quo pricing• value-based pricing• discounts:

trade, package, cash, promotional, quantity, seasonal, coupons, rebates

Price


Marketing

The 4 P’s

product place

customer

price promotion


Marketing

Promotion

source: McGraw-Hill Magazines (1989)


Marketing

Forest Firms Try a Different Pitch by M. McCulloughThe Vancouver Sun (date unknown)


Marketing

• communication that a company uses to inform existing and potential customers about who they are and what they are selling

• generic model:

push

through supply chain

pull

Promotion


Marketing

Promotion

Research Inputs

Strategic Decisions

Tactical Execution

Evaluate & Adjust

Measure Effectiveness

Market Impact

Constraints & Influences

Feedback

promotional planning


Marketing

PromotionPROMOTION

mass selling sales promotion personal selling

advertising publicity end-user company personnel


theoretical model for promotion


Marketing

PromotionPROMOTION




low high

cost per contact

effectiveness of communication


Marketing

PromotionPROMOTION



sending messages to customers / potential customers through media (TV, magazines, flyers, radio, direct mail, internet, social media)

• to reinforce positive attitudes• to communicate incentives• to change attitudes



Marketing

PromotionPROMOTION



information about a firm / product disseminated to the public at no (or little) cost

• news releases, media reporting, etc.



Marketing

PromotionPROMOTION



• trade shows, showrooms, free samples, coupons, discounts, point of purchase displays, etc.



Marketing

PROMOTION



Direct presentation of information related to a firm’s product/service

• order-taking• relationship-building• missionary sales• technical sales


dominates forest products industry

Promotion


Marketing

Promotion

Find an advertisement in a wood products / forestry journal and answer the following questions:

• What is the advertisement communicating about the company, product, service, etc.?

• How is the advertisement getting the message across?• Who is the target audience?• Is it an effective advertisement? Why or why not?


Marketing

• if promotion is communication that a company uses to inform existing and potential customers about who they are and what they are selling,

• then markets are the set of all existing and potential buyers of a particular service

Promotion


Marketing

mass marketing:a single marketing aimed at as broad a range of customers as possible

market

target marketing:segmenting the market and targeting products/services to one or more well-defined customer groups

market

Promotion


Marketing

Promotion

Why do most forest products firms now employ some form of target marketing / segmentation?


Marketing

market

market segments should be:• homogenous• accessible• economical

examples of market segments:• industrial vs. consumer• geographic• customer / product class• demographic• psychographic

target markets / segments

Promotion


Marketing

marketing strategy

market

product place

customer

price promotion


Marketing

Marketing strategy

Devise (brainstorm) a marketing strategy for a hypothetical forest product.

Documents

WOOD 465 Marketing 2012wood465-kozak.sites.olt.ubc.ca/files/2013/01/WOOD-465_Marketing_20… · WOOD 465 – Business Management in the Wood Industry Component #3 –Marketing Marketing