tactical and strategic market planning (j.seppälä) [read-only] · 2008-12-02 · tactical and...

Tactical and Strategic Market Planningin Principle and Practice

Forest Products Marketing Workshop3-6 April 2006, Novi Sad, Serbia and Montenegro

2

Agenda

StrategiesProductsCustomersGeographical areaCompetitive advantages

(Facilitate necessary relationships & implementation)

(On-the-ground activities needed for execution)

StructuresOrganizationDistribution

FunctionsMarketing communicationPricing

Discussion

Environment & participation

3

Agenda

Environment & participationStrategies

ProductsCustomersGeographical areaCompetitive advantages



Discussion

4

RAW MATERIAL MARKETS

CustomerA

CustomerB

CustomerC

PRODUCTION

Company X

Market Planning Environment

Information flow

Material flow

As important

& Participation

5

Agenda





Discussion

6

Strategies – Products in Principle

Commodity, special or custom-madeCharacteristic

QualityDimensionsLengths

Realistic Raw materialProduction processSales

7

Strategies – Products in Practice

• Particleboard is a wood-based panel made of small wood particles bonded together normally with an interior type resin (UF, urea formaldehyde). Small amounts of exterior grade particleboard bonded with phenolic resin are also being produced. The board is typically of three-layer construction where fine particles are on the surface and coarse particles in the core.

• The wood raw material can consist of small, low value round wood, and of various industrial wood residues such as chips, saw dust and planer shavings. Both softwoods and hardwoods can be used successfully.

• The density of the board is 600-800 kg/m3 depending on the board thickness, end-use and the density of the wood raw material,. The width of the board is 1220-2750 mm and the length 2440-7300 mm. The thickness range is typically 6-40 mm.

• Overlaying, mainly with melamine film, is a standard feature in the European particleboard industry and in most cases mills overlay 60 – 75% of their output. The major companies have also their own melamine film impregnating lines.

Particleboard – Product Description and Key Characteristics

8


KD 18%

U/S, VI

Random 3.0 - 5.4

22x75/100/125/150/175

25x75/100/125/150/175/200

50x50/100/125/150/175/200

Pine: 450 000

Spruce: 150 000

BOARDS, PAR

KD 16-18%

VI and better

Random 3.0 - 5.4

22x125/150/175

25x125/150/175

Pine: 215 000

Spruce: 135 000

FLOORING/

CLADDING

KD 18%

TR 26, for roof trusses

MC 24, (C 24 can also be visual sorted)

Random 3.0 - 5.4

36x100/125/150/175

47x100/125/150/175/ 200/225/250

Pine: 50 000

Spruce: 700 000

CONSTRUCTION SAWNWOOD*

CONSTRUCTION

Windows: U/S, SF

Panel doors: “knotty pine”

Door linings: SF

Furniture: “knotty pine”

EGP: SFU/S, V, VIQuality

INDUSTRIAL END-USES

Windows: 16-18%

Doors: 10-12%

14-16% (linings)

Windows: Random

Panel doors: 2.1/2.4

Door linings: 4.2/5.1

Windows: 50x125/150;63x100/150/175;

75x100/150

Panel doors: 22/50X100

Door linings: 32x100-175

Pine: 290 000

Spruce: 90 000

WINDOWS/DOORS

10-12%

Random

Furniture:

50x100/115/125

25x50/75/100/150/175

EGP:

22x100/150/200 (planed)

Pine: 230 000

Spruce: 200 000

FURNITURE/EGP

16-18% or further

KD to 10-12%Moisture

Random

(3.0-5.4)Lengths

19x100/125

25x100/150

38/50x75-225

50x100/125/150

Main Dimensions

(nominal size)

Pine: 350 000

Spruce: 40 000 Sawnwood

Use

MOULDINGS

KD 18%

U/S, VI

Random 3.0 - 5.4

22x75/100/125/150/175

25x75/100/125/150/175/200

50x50/100/125/150/175/200

Pine: 450 000

Spruce: 150 000

BOARDS, PAR

KD 16-18%

VI and better

Random 3.0 - 5.4

22x125/150/175

25x125/150/175

Pine: 215 000

Spruce: 135 000

FLOORING/

CLADDING

KD 18%

TR 26, for roof trusses

MC 24, (C 24 can also be visual sorted)

Random 3.0 - 5.4

36x100/125/150/175

47x100/125/150/175/ 200/225/250

Pine: 50 000

Spruce: 700 000

CONSTRUCTION SAWNWOOD*

CONSTRUCTION

Windows: U/S, SF

Panel doors: “knotty pine”

Door linings: SF

Furniture: “knotty pine”

EGP: SFU/S, V, VIQuality

INDUSTRIAL END-USES

Windows: 16-18%

Doors: 10-12%

14-16% (linings)

Windows: Random

Panel doors: 2.1/2.4

Door linings: 4.2/5.1

Windows: 50x125/150;63x100/150/175;

75x100/150

Panel doors: 22/50X100

Door linings: 32x100-175

Pine: 290 000

Spruce: 90 000

WINDOWS/DOORS

10-12%

Random

Furniture:

50x100/115/125

25x50/75/100/150/175

EGP:

22x100/150/200 (planed)

Pine: 230 000

Spruce: 200 000

FURNITURE/EGP

16-18% or further

KD to 10-12%Moisture

Random

(3.0-5.4)Lengths

19x100/125

25x100/150

38/50x75-225

50x100/125/150

Main Dimensions

(nominal size)

Pine: 350 000

Spruce: 40 000 Sawnwood

Use

MOULDINGS

9


30 000 m3

15 000 m3

15 000 m3

DomesticGOSTSideboards

Center-cut

70 000 m360 000 m380 000 m330 000 m3TOTAL

The USA

Japan

China

10 000 m35 000 m35 000 m35 000 m3Other W-E

5 000 m3

Kazakhstan

20 000 m315 000 m325 000 m3M-East

30 000 m325 000 m325 000 m3N-Africa

5 000 m3Italy

5 000 m310 000 m35 000 m3Spain

5 000 m3France

10 000 m310 000 m310 000 m310 000 m3The UK

VIVU/S

30 000 m3

15 000 m3

15 000 m3

DomesticGOSTSideboards

Center-cut

70 000 m360 000 m380 000 m330 000 m3TOTAL

The USA

Japan

China

10 000 m35 000 m35 000 m35 000 m3Other W-E

5 000 m3

Kazakhstan

20 000 m315 000 m325 000 m3M-East

30 000 m325 000 m325 000 m3N-Africa

5 000 m3Italy

5 000 m310 000 m35 000 m3Spain

5 000 m3France

10 000 m310 000 m310 000 m310 000 m3The UK

VIVU/S

10

Agenda





Discussion

11

Strategies – Customers in Principle

As many as possible, few well specified or knownMiddlemen vs. final end user

E.g. agent vs. furniture company Overall picture in the selected end use segment(s)

Industry structureSizeLocationKey personnel (procurement & production)

12

Strategies – Customers in Practice

0

25

50

75

100

1 - 2.5 2.5 - 5 5 - 8 8 - 15 15 - 25 25 - 50 > 50

Size Strata, 1000 m3/a sawnwood

Hardwood

OtherSoftwoodScandinavianPine

1

Number of Companies

3

2

5

11

11

13


Jeld-Wen (JW)

Magnet (M)

Dale Joinery (D)

Abbott Joinery

Bennett Windows

BKL JoineryLtd

Whitaker & Co

Rudmans

D.Smith

MH Joinery Products

Bennett & Co

Howarth Timber

Nova Joinery

Northern Joinery

STP Group (STP)

Edmont Joinery

D

P

P

PD

JW

JW

JW

M

M

STP

STP

JW

Handrahan

Cheshire

Jennor Timber

Olwith

Belfield

14

10 000-50 000Contact Person: Mr Clive Freeman

Tel: +44 1787 88 17 77

Fax: +44 1787 24 20 13

Website: www.ridgeons.co.uk

Off Windham Road

Chilton Industrial Estate

Sudbury CO10 2XH

RidgeonsImporters

+ 50 000

Contact Person: Mr Sampsa Auvinen

Tel: +44 1405 76 66 66

Fax: +44 1405 76 46 46

Website: No website available

Timber Terminal Normandy Way

Goole, Yorkshire DN14 5SPTsar Timber DistributionDistributors

+50 000Contact Person: Mr Lorweiy

Tel: +44 1469 53 23 00

Fax: +44 1469 53 18 67

Website: www.howarth-timber.co.uk

Lincoln Caslte

Lincoln Castle Way

New Holland

Lincolnshire DN19 7RR

Howarth TimberImporters

+50 000Contact Person: Mr Andrew Walsh

Tel: +44 1473 27 69 00

Fax: +44 1473 27 69 11

Website: www.kdm.co.uk

The Havens

Ransomes Europark

Ipswitch

Suffolk IP3 95J

KDM InternationalTrader

10 000-50 000

Contact Person: Mr Tony Tanner

Tel: + 44 1243 78 51 41

Fax: + 44 1243 53 11 51

Website: www.dcover.co.uk

Sussex House

Quarry Lane

Chichester

West Sussex PO19 8PE

Covers Timber Importers and Builder MerchantsImporters

WOOD USE (m3/a)CONTACT INFOLOCATIONCOMPANYSECTOR

10 000-50 000Contact Person: Mr Clive Freeman

Tel: +44 1787 88 17 77

Fax: +44 1787 24 20 13

Website: www.ridgeons.co.uk

Off Windham Road

Chilton Industrial Estate

Sudbury CO10 2XH

RidgeonsImporters

+ 50 000

Contact Person: Mr Sampsa Auvinen

Tel: +44 1405 76 66 66

Fax: +44 1405 76 46 46

Website: No website available

Timber Terminal Normandy Way

Goole, Yorkshire DN14 5SPTsar Timber DistributionDistributors

+50 000Contact Person: Mr Lorweiy

Tel: +44 1469 53 23 00

Fax: +44 1469 53 18 67

Website: www.howarth-timber.co.uk

Lincoln Caslte

Lincoln Castle Way

New Holland

Lincolnshire DN19 7RR

Howarth TimberImporters

+50 000Contact Person: Mr Andrew Walsh

Tel: +44 1473 27 69 00

Fax: +44 1473 27 69 11

Website: www.kdm.co.uk

The Havens

Ransomes Europark

Ipswitch

Suffolk IP3 95J

KDM InternationalTrader

10 000-50 000

Contact Person: Mr Tony Tanner

Tel: + 44 1243 78 51 41

Fax: + 44 1243 53 11 51

Website: www.dcover.co.uk

Sussex House

Quarry Lane

Chichester

West Sussex PO19 8PE

Covers Timber Importers and Builder MerchantsImporters



25 000-50 000

Contact Person:

Mr Mike Ramsey

Tel: + 44 1274 65 65 63

Fax: + 44 1274 65 65 05

Website: www.ramsey-uk.com

Wellington Street Sawmills

Sticker Lane

Bradford

BD4 8BW

Peter RamseyFurniture (Components)

15 000-25 000

Contact Person:

Mr Peter Mander

Tel: + 44 1225 75 44 11

Fax: + 44 1225 77 74 23

Website: www.airsprungbeds.co.uk

Canal Road

Trowbridge

Wiltshire

BA14 8RQ

Airsprung BedsFurniture (Beds)

25 000-50 000

Contact Person:

Ian Nackie

Tel: + 44 1282 81 58 88

Fax: + 44 1282 81 68 40

Website: www.silentnight.co.uk

Barnoldswick

Lancashire

BB18 6BL

Silent Night BedsFurniture (Beds)

25 000-50 000

Tel: + 44 208 200 80 00

Fax: + 44 20 8200 8636

Website: www.mfigroup.co.uk

MFI Furniture Group

Southon House

333 The Hyde

Edgware Road

London, NW9 6TD

Hygena-MFIFurniture (Kitchens)


25 000-50 000

Contact Person:

Mr Mike Ramsey

Tel: + 44 1274 65 65 63

Fax: + 44 1274 65 65 05

Website: www.ramsey-uk.com

Wellington Street Sawmills

Sticker Lane

Bradford

BD4 8BW

Peter RamseyFurniture (Components)

15 000-25 000

Contact Person:

Mr Peter Mander

Tel: + 44 1225 75 44 11

Fax: + 44 1225 77 74 23

Website: www.airsprungbeds.co.uk

Canal Road

Trowbridge

Wiltshire

BA14 8RQ

Airsprung BedsFurniture (Beds)

25 000-50 000

Contact Person:

Ian Nackie

Tel: + 44 1282 81 58 88

Fax: + 44 1282 81 68 40

Website: www.silentnight.co.uk

Barnoldswick

Lancashire

BB18 6BL

Silent Night BedsFurniture (Beds)

25 000-50 000

Tel: + 44 208 200 80 00

Fax: + 44 20 8200 8636

Website: www.mfigroup.co.uk

MFI Furniture Group

Southon House

333 The Hyde

Edgware Road

London, NW9 6TD

Hygena-MFIFurniture (Kitchens)


15

Agenda





Discussion

16

Strategies – Geographical Area in Principle

As many as possible or few well specified Overall picture

Global or nationalCompeting suppliersHistory and outlook

17

Strategies – Geographical Area in Practice

Production

Consumption

Million m3 in 2004

WesternEurope

80 78

EasternEurope

1423

RussianFederation

186

NorthAmerica

118 117

LatinAmerica

20 17

Asia-Pacific

38

52

India &Rest of Asia

5 7

Oceania

8 7

Africa

3 6

18


– Major Trade Flows, in Million m3 –

3

0.5

0.5

0.82.7

2 1

25 3

2.335

0.5

Rapid supply decrease from USA driven by weakening

competitiveness

Emerging supply source in sawnwood

– expansion restricted by lack of processing capacity

An important outlet for Nordic suppliers

of lower grades

Increasing intra-regional trade driven by growing capacities

Direction of exports has turned from Europe to

North America

Increasing integration with Western Europe –

driven by foreign ownership

Increasing potential but

prospects limited due to cost

competitiveness and market acceptance

EU

2.0

19


0

10

20

30

40

50

60

70

80

90

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Million m3

Others

Norway

Spain

Austria

Finland

Sweden

Italy

France

UK

Germany

20


-0,5

0,5

1,5

2,5

3,5

4,5

5,5

6,5

7,5

8,5

9,5

10,5

11,5

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004e

- Million m3 -

Exports+345,000 m3

Volume Change,1990-2004e

Domestic supply+620,000 m3

Other Imports-4.0 Mm3

Imports from Russia-480,000 m3

Imports from Nordic Countries+2.1 Mm3

Imports from Baltics+2.3 Mm3

Production Consumption

19%

22%

46%

12%

23%

42%

6%

6%

22%

Production+960,000 m3

7%

21


-2

-1

0

1

2

3

4

0 20 40 60 80 100

%-Share of Global Demand

Annual Demand Growth % 2004-2010

Russia

Eastern EuropeChina

North AmericaWestern Europe

Japan

Latin AmericaOther Asia

Rest of

World

22


450 000 m3450 000 m3450 000 m3360 000 m3270 000 m3TOTAL

The USA

Japan

China

45 000 m347 000 m350 000 m340 000 m330 000 m3Other W-E

150 000 m3110 000 m380 000 m340 000 m310 000 m3

Kazakhstan

70 000 m380 000 m390 000 m380 000 m375 000 m3M-East

80 000 m3100 000 m3110 000 m3100 000 m395 000 m3N-Africa

20 000 m320 000 m320 000 m315 000 m310 000 m3Italy

24 000 m325 000 m326 000 m323 000 m320 000 m3Spain

6 000 m38 000 m39 000 m37 000 m35 000 m3France

55 000 m360 000 m365 000 m355 000 m345 000 m3The UK

201020092008200720062005

450 000 m3450 000 m3450 000 m3360 000 m3270 000 m3TOTAL

The USA

Japan

China

45 000 m347 000 m350 000 m340 000 m330 000 m3Other W-E

150 000 m3110 000 m380 000 m340 000 m310 000 m3

Kazakhstan

70 000 m380 000 m390 000 m380 000 m375 000 m3M-East

80 000 m3100 000 m3110 000 m3100 000 m395 000 m3N-Africa

20 000 m320 000 m320 000 m315 000 m310 000 m3Italy

24 000 m325 000 m326 000 m323 000 m320 000 m3Spain

6 000 m38 000 m39 000 m37 000 m35 000 m3France

55 000 m360 000 m365 000 m355 000 m345 000 m3The UK

201020092008200720062005

23

Agenda





Discussion

24

Strategies – Competitive Advantages in Principle

QualitativeRaw material and product qualityKnow howGovernment policies

QuantitativeCost competitiveness

• Raw material cost• Transport cost• Taxes and levies

25

Strategies – Competitive Advantages in Practice

Containers used. Plastic wrapping on 5 sides.

Wrapping on 5 sides.



Not strictly defined, usually agreed with client. Often plastic wrapping on 5 sides.

Packaging

16-20%.20-22%, also AD.About 20%.Both framing andDIY products about 20%.

Varies among countries & end use segments. In general mouldings & EGP 16-18%, joinery 12%±2 or 16-18% and furniture 10-12%.

Moisture

No standardization.

Almost purely rough sawn.

Random lengths.

Low standardization. Lengths (3 & especially 4 m) getting more importance.


Very low standardization.


Mostly random lengths.

Very standardized.

Own dimensions.

Mostly planed for both construction & DIY.

Low level of standardized products between countries. Increasingly further processed (planing, FJ, CTL, etc.).

Dimensions& Lengths

Generally lower grades, mostly VI. However, some further processed products.

All grades, however, mostly lower grades.

Generally lower grades, mostly VI. However, Tunisia offers demand for better qualities.

Own grading. In “Dimension lumber” graded (stamped) and ungraded. Price for latter significantly lower.

Better qualities for appearance applications and construction. Lower grades for pallet & packaging and garden & fencing.

Grade

ChinaMiddleEast

NorthAfrica

TheUSA

WesternEurope





Not strictly defined, usually agreed with client. Often plastic wrapping on 5 sides.

Packaging

16-20%.20-22%, also AD.About 20%.Both framing andDIY products about 20%.

Varies among countries & end use segments. In general mouldings & EGP 16-18%, joinery 12%±2 or 16-18% and furniture 10-12%.

Moisture

No standardization.


Random lengths.

Low standardization. Lengths (3 & especially 4 m) getting more importance.


Very low standardization.


Mostly random lengths.

Very standardized.

Own dimensions.

Mostly planed for both construction & DIY.

Low level of standardized products between countries. Increasingly further processed (planing, FJ, CTL, etc.).

Dimensions& Lengths

Generally lower grades, mostly VI. However, some further processed products.

All grades, however, mostly lower grades.

Generally lower grades, mostly VI. However, Tunisia offers demand for better qualities.

Own grading. In “Dimension lumber” graded (stamped) and ungraded. Price for latter significantly lower.

Better qualities for appearance applications and construction. Lower grades for pallet & packaging and garden & fencing.

Grade

ChinaMiddleEast

NorthAfrica

TheUSA

WesternEurope

Credit insurance recommended.

Letter of credit. However, varies among customers.


Letter of credit.


Usually 30 days minus 5% from the day of bill of lading.


Usually 30-90 days minus 2% from the day of bill of lading.



Payment

About 1-1,5 month.About 1-1,5 month.About 1-1,5 month.About 2 months.3-4 weeks.Time ofDelivery

Tens of containers (40-45 m3 per container) by shipment.

From thousands of m3 to tens of thousands m3.



Varies from tens of m3 among industrial end use segments to some hundreds m3

in DIY/BM sectors.

Size ofDelivery

No significance.No significance.No significance.

Environmental certification has less importance vs. Europe but its increasing gradually.

Importance varies among countries and end use segments. Usually more requirement for market access than premium. However, in some markets small premium paid.

Certification

ChinaMiddleEast

NorthAfrica

TheUSA

WesternEurope


Letter of credit. However, varies among customers.


Letter of credit.


Usually 30 days minus 5% from the day of bill of lading.





Payment

About 1-1,5 month.About 1-1,5 month.About 1-1,5 month.About 2 months.3-4 weeks.Time ofDelivery

Tens of containers (40-45 m3 per container) by shipment.




Varies from tens of m3 among industrial end use segments to some hundreds m3

in DIY/BM sectors.

Size ofDelivery

No significance.No significance.No significance.

Environmental certification has less importance vs. Europe but its increasing gradually.

Importance varies among countries and end use segments. Usually more requirement for market access than premium. However, in some markets small premium paid.

Certification

ChinaMiddleEast

NorthAfrica

TheUSA

WesternEurope

26


-50

-25

0

25

50

75

100

125

150

175

200

225

Finland Sweden Canada(Quebec)

UK Estonia WesternRussia

CapitalChargesDistribution

Other Costs

Personnel

Energy

Wood Net

ResidueIncome

- EUR/m3 -

*

* WACC

**

** Incl. Customs in Russia

27


0 10 20 30 40 50 60 70

Ireland, sitka spruce

UK / Scotland, sitka spruce

Finland, spruce

Sweden, spruce

Germany, spruce

Czech Republic, spruce

Latvia, spruce

Estonia, spruce

Russia / Leningrad, spruce

Russia / Archangelsk, spruceStumpageHarvestingTransportOverhead

- EUR/m3 sob -

28


0 5 10 15 20 25 30

Log handling

Saw infeed

Sawing lines

Handling of by-products

Green sorting

Mechanised sticker-stacking

Kiln drying, old

Kiln drying, new

Grading, manual

Grading,new

Boiler plant

Age, Years Min Max

Benchmark competitors

29

Perception of Irish Suppliers – Pallet & Packaging

Product Price Service Relation-ship

R&D

Very

Goo

dVe

ry P

oor

Hig

hLo

w

Perf

orm

ance

Impo

rtan

ce

Average* Irish Importance

* Average score of all countries in scope

Perception of Irish Suppliers – Garden & Fencing


R&D


Very

Goo

dVe

ry P

oor

Hig

hLo

w

Perf

orm

ance

Impo

rtan

ce

Perception of Irish Suppliers - TFH


R&D

Very

Goo

dVe

ry P

oor

Hig

hLo

w

Perf

orm

ance

Impo

rtan

ce

Average* ImportanceSWE Baltic

Relation-ship

Perception of Irish Suppliers – BMs/TMs & DIY

Product Price Service R&D

Very

Goo

dVe

ry P

oor

Hig

hLo

w

Perf

orm

ance

Impo

rtan

ce



30

Agenda





Discussion

31

Structures – Organization in Principle

All relevant parts of supply chain to participateRaw materialProduction processSales

Applies to both internal & externalE.g. outsourced procurement or further processing

32

Structures – Organization in Practice

Sales Director

Sales Manager

Western Europe

Production Planning

Manager

Sales Manager

Middle EastLogistics Manager

Sales Manager

New MarketsSales Assistant(s)

+ More specific communication aimed at the customers - thus high impact.

+ Effective at building buyers preferences, convictions and actions.

+ Provides immediate feedback – most valuable at the beginning of the promotion.

+ Allows the mills to adjust the message quickly.

+ Buyer feels a need to listen and respond – creates mutual trust.

- Cost per person is high, most expensive promotional tool.

33

Structures – Organization in Practice

Traditional

A A A A

S

A A

Advanced

S S S S

S

S = SalesmanA = Agent

34

Agenda





Discussion

35

Structures – Distribution in Principle

Overall picture of ”routes to markets” ProductCountryEnd use sectors

Direct sales vs. middlemenService

36

Structures – Distribution in Practice

Foreign Supplier

LargeEnd-Users

Carpenters/small size house builders

Border

Forwarding Companies

Trading House

Wholesalers (several layers)

Medium-size house builders

Precut-sawmills

Export Agent

Import Agent

Fewer

Larger

Broader

Deeper

37


Furniture Mouldings

Producers / Suppliers

End-User Size Strata

(Furniture)

Furniture manufacturers

>25 000 m3

5000 – 25000 m3

Large sawmill groups

Small & medium-size

sawmill groups1000 – 5000 m3

Agents

< 1000 m3Builders

Merchants

EGP & Component

ManufacturersSpecialist Traders &

Distributors

Importers

>15 000 m3

1000 -5000 m3

Producers / Suppliers

End-User Size Strata

< 1000 m3

(e.g, builders merchants)

5000 – 15000 m3

Importers

AgentsSmall &

medium -size sawmill groups

Large sawmill groups

38


Marketing channelServiceDeliveries

Direct sales or agent.

Communication frequency: abt. once every second week

Capability for wide specifications

Bigger lots

CIF/FAS

Flexible schedule

Bulk products

Importers

Through an importer or agent. Direct sales requires presence (sales man and/or landed stock) in the market.

Communication frequency: twice a week

Close contact, fast feedback

Reliability

Product development

Small lots

CIP - Just On Time

Specialities

IndustrialEnd

Users

Through an importer or agent. Later on possibly direct sales.

Communication frequency: once every second week

Repeating pattern of operations

Small lots

CIP

Machined bulk but whole product range

Demanding packaging

Do-It-Yourself


Communication frequency: once a week

Repeating pattern of operations, some variation

Medium size lots

CIF/CIP/FOB

Bulk products

BuildersMerchants

Marketing channelServiceDeliveries

Direct sales or agent.

Communication frequency: abt. once every second week

Capability for wide specifications

Bigger lots

CIF/FAS

Flexible schedule

Bulk products

Importers

Through an importer or agent. Direct sales requires presence (sales man and/or landed stock) in the market.

Communication frequency: twice a week

Close contact, fast feedback

Reliability

Product development

Small lots

CIP - Just On Time

Specialities

IndustrialEnd

Users


Communication frequency: once every second week

Repeating pattern of operations

Small lots

CIP

Machined bulk but whole product range

Demanding packaging

Do-It-Yourself


Communication frequency: once a week

Repeating pattern of operations, some variation

Medium size lots

CIF/CIP/FOB

Bulk products

BuildersMerchants

39


Extensive personal selling, promotion, and improvement of understanding of the market.

Performance according to promises (stability of product characteristics and reliable deliveries).

Certification.

Match mills’ technical and operational capabilities up to market requirements.

To be agreed with buyers, however, vessel loads from St. Petersburg.

6-8 shipments per year.

Preferably CIF/C&F.

Rough KD sawn softwood

Pine and larch

Standard sizes, lengths

Standard qualities

100% importers and agents-> Construction-> DIY / BMs-> Joinery-> Mouldings-> Furniture & EGP-> Garden & fencing

2006-

2007

Close co-operation with direct customers.

Investments needed

- Special kilning- Planing operation- Raw material procurement

to support customer needs (e.g. lengths).

Vessel loads from St. Petersburg.


Distribution co-operation with selected partners.

CIP buyers yard for industrial end users.


Special KD sawn softwood (tailored sizes, lengths, moisture)

Planed KD sawn softwood (PAR and profiled)

Pine and larch

>50% via importers and agents as above.

<50% direct sales to -> Construction-> DIY/BMs-> Joinery-> Mouldings-> Furniture & EGP-> Garden & Fencing

2008-

2010

Actions &InvestmentsDistributionProductsSegment

Extensive personal selling, promotion, and improvement of understanding of the market.

Performance according to promises (stability of product characteristics and reliable deliveries).

Certification.

Match mills’ technical and operational capabilities up to market requirements.

To be agreed with buyers, however, vessel loads from St. Petersburg.


Preferably CIF/C&F.


Pine and larch

Standard sizes, lengths

Standard qualities

100% importers and agents-> Construction-> DIY / BMs-> Joinery-> Mouldings-> Furniture & EGP-> Garden & fencing

2006-

2007

Close co-operation with direct customers.

Investments needed

- Special kilning- Planing operation- Raw material procurement

to support customer needs (e.g. lengths).

Vessel loads from St. Petersburg.


Distribution co-operation with selected partners.

CIP buyers yard for industrial end users.


Special KD sawn softwood (tailored sizes, lengths, moisture)

Planed KD sawn softwood (PAR and profiled)

Pine and larch

>50% via importers and agents as above.

<50% direct sales to -> Construction-> DIY/BMs-> Joinery-> Mouldings-> Furniture & EGP-> Garden & Fencing

2008-

2010

Actions &InvestmentsDistributionProductsSegment

40

Agenda





Discussion

41

Functions – Marketing Communication

Branding / ImageTo get customers easily remember the products and services of company X over the competitorsShipping marks, company logo - still strong tools in international trade

AdvertisingAdvertisements in local trade magazines in the main marketsDirect mail to strategic customers - existing but especially potentialInternet home page with detailed information of the products and services of company X

Trade fairs and exhibitionsPresence at main fairs and exhibitions in the main markets. This does not necessarily mean own stands. However exhibitions can be used for arranging meetings with customers

Personal selling

42

Agenda





Discussion

43

Functions – Pricing in Principle

Overall pictureSpot pricesHistory and outlook (real vs. nominal)

FundamentalsPolicy

44

Functions – Pricing in Practice

255

271

318

318

287

239

167

195

215

287

310

109

135

139

193

99

107

0 50 100 150 200 250 300 350

US Hemlock, 4-1/8" sq. S4S

Canadian Hemlock, 4-1/8" sq. S4S

US Douglas Fir, 4-1/8"x6&wdr

Japanese Hemlock Taruki, 36x45mm, 4 mtr

Canadian SPF 2"X4"-8 KD

Finnish Whitewood, #5&Btr, 42x150-220 mm

New Zealand Radiata Pine, Flitches 8"-12"

Chilean Radiata Pine, Board

Japanese Radiata Pine, Board

Japanese Whitewood Taruki, 30-40mm

Japanese Redwood Taruki, 30x39mm

N.A. SPF/Hemlock/Fir, Green 60% #2 & Btr

Russian Larch, rough, green

Russian White Pine, rough, green

Russian Red Pine, rough, green

N.A. SPF, Economy, KD, 2x4'

N.A. Hemlock, Unseasoned, 4 1/8'', 8/20'

Japa

nC

hina

Taiw

an- USD/m3, Free at Large Wholesaler at the Target Market -

45


0

50

100

150

200

250

1998 1999 2000 2001 2002 2003 2004 2005

EUR/m3

NA, E-SPF, merch.KD,1-7/8x3" & wider8/16'Swedish Carcassing, KD, C16, 47 x100 mm, R/LBaltic Red Pine, 47 mm, structuralungradedFinnish Red Pine, fifths, 50x175 mm, R/L

46

Functions – Pricing in PracticeTraditional pricing of Nordic pine in the UK. The Russian pricing is traditionally based on similar principles. However, exlog is usually not guaranteed, and carries no premium. Russian IV:s are in principle priced as Nordic V:s. However 25x100/125 boards are usually sold at base price. In practice, pricing varies a lot between different mills and depends on supply/demand balance of individual items. Also average pricing is being used. Average pricing, however usually leads to worse result than item based pricing.

Base price (150/175 mm) 200 mm 225 mm

U/S 50/63/75 mm 210 £ + 7-9 £ +14-20 £32/38 4 exlog mm + 20-25 £ + 7-9 £ +14-20 £32/38 2 exlog mm + 8-10 £25 mm usually market driven depending on supply/demand

V 50/63/75 160 £ + 3 £ + 6 £32/38 mm + 7-8 £ + 3 £ + 6 £25 mm + 20-30 £

Traditional pricing of Nordic spruce in the UK

Base price (150/175 mm) 200 mm 225 mmU/S 50/63/75 mm 190 € + 3 € + 6 €

32/38 mm + 9-11 €V The meaning of the scale is lower and supply/demand sets the exact price

47


1. Stage (max 1 year)– Penetration pricing – start offering at the market price, gather detailed information from different

customers.– Accept slightly lower prices– Create credibility by performing according to promises.

2. Stage (1-3 years)– Economy pricing (for bulk products)– Keep costs low and sell slightly below market price. This guarantees the basic volume – thus

reduces costs.

3. Stage (3 years +)– Differentiate bulk and special products– Permanent economy pricing for bulk– Contract pricing according to the market. Volume related incentive system to be created for

each customer to guarantee required volumes.– Premium pricing for special products – For special products, which give advantages for the customers.

48

Agenda





Discussion

49

Contact Details and Further Information

Jaakko Pöyry Consulting Office Network

Mr. Jarno Seppälä

Tel: +358-9-8947-2078Fax: +358-9-878-2881

E-mail: [email protected]

Jaakko Pöyry Consultingglobal contacts:

www.consulting.poyry.com

HelsinkiStockholm

N

Munich

tactical and strategic market planning (j.seppälä) [read-only] · 2008-12-02 · tactical and...

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