FORESTRY WOOD PRODUCTS

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FORESTRY WOOD PRODUCTS

• Assoc. Prof. Dr. Nickola Stoyanov
• University of Forestry
• Sofia, Bulgaria

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structure of a product
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Base use

• In general, the main benefit of a product is
  abstract in nature.
• When booking a hotel room, one expects to find
  sleep and rest at night. However, these features
  cannot be bought in this way.
• Only the generic product is marketable - in the
  case of the hotel, this will be represented by at
  least a bed and a receptionist's desk

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Generic Product

• Quality
• Special characteristics
• Branch
• Style
• Packing

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Expected product

• Placement (distribution)
• Price
• Installation
• Service
• Garantee

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Augmented product

• Additional benefits

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DEFINITION OF THE PRODUCT

• Product is the sum of the physical,
  psychological, and sociological satisfactions
  that the buyer derives from purchase, ownership,
  and consumption.
• From this standpoint, products are
  consumer-satisfying objects that include such
  things as accessories, packaging, and service.

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Product Classification

• Agricultural products and raw materials.
• Industrial goods
• a.Raw materials and semifinished goods.
• b.Major and minor equipment, such as basic
  machinery, tools, and other processing
  facilities.
• c.Parts or components, which become an
  integral element of some other finished good.
• d.Supplies or items used to operate the
  business but that do not become part of the final
  product.

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Product Classification

• Consumer goods
• a.Convenience goods, such as food, which
  are purchased frequently with minimum effort.
  Impulse goods would also fall into thiscategory.
• b.Shopping goods, such as appliances,
  which are purchased after some time and energy
  are spent comparing the various offerings.
• c.Specialty goods, which are unique in
  some way so the consumer will make a special
  effort to obtain them.

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New product

• New products are a vital part of a firm's
  competitive growth strategy.

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What is a 'new' product?

• A new product will be considered anything which
  is perceived as such by the consumer, or with
  which the firm has no previous experience. The
  former permits the inclusion of variants in
  existing products, and their packaging, as well
  as totally new products such as satellite
  television, body scanners or laptop computers.

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NEW PRODUCT POLICY (How many ways can a product
be new?)

• A product performing an entirely new function,
  such as television, which for the first time
  permitted the transmission of audiovisual
  signals.
• A product that offers improved performance of an
  existing function, such as a wristwatch whose
  balance wheel has been replaced by a tuning fork.
• A product that is a new application of an
  existing product. For example, the aerosol bomb,
  which was first developed for insecticides, was
  later applied in paints.
• A product that offers additional functions. The
  hands-free telephone, for instance, does what the
  earlier telephone did, plus more.

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NEW PRODUCT POLICY (How many ways can a product
be new?)

• An existing product offered to a new market. This
  may be done, for example, by repositioning or by
  taking a regional brand into other regions.
• A product that through lower cost is able to
  reach more buyers. Hand calculators are an
  example.
• An upgraded product defined as an existing
  product integrated into another existing product.
  The clock-radio is an example.
• A downgraded product. For example, a manufacturer
  switches from buying a component to producing a
  cheaper component in-house and marketing it.
• A restyled product. Annual auto and clothing
  changes are examples.

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The New product Development Process

• Idea generation
• Idea screening
• Project planning
• Product development
• Test marketing
• Commercialization

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Idea Generation

• Every product starts as an idea. But all new
  product ideas do not have equal merit or
  potential for economic or commercial success.
  Some estimates indicate that as many as 60 or 70
  ideas are necessary to yield one successful
  product. This is an average figure, but it serves
  to illustrate the fact that new product ideas
  have a high mortality rate. In terms of money, of
  all the dollars of new product expense, almost
  three fourths go to unsuccessful products.
• The problem at this stage is to ensure that all
  new product ideas available to the company at
  least have a chance to be heard and evaluated.
  This includes recognizing available sources of
  new product ideas and funneling these ideas to
  appropriate decision makers for screening.

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Idea Screening

• The primary function of the screening stage is
  twofold first, to eliminate ideas for new
  products that could not be profitably marketed by
  the firm and, second, to expand viable ideas into
  a full product concept. New product ideas may be
  eliminated either because they are outside the
  fields of the firm's interest or because the firm
  does not have the necessary resources or
  technology to produce the product at a profit.
  However, other ideas are accepted for further
  study because they appear to have adequate profit
  potential and offer the firm a competitive
  advantage in the market.

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Project Planning

• The product proposal is evaluated further and
  responsibility for the project is assigned to a
  project team.
• The proposal is analyzed in terms of production,
  marketing, financial, and competitive factors.
• A development budget is established, and some
  preliminary marketing and technical research is
  undertaken.
• The product is actually designed in a rough form.
  
• Alternative product features and component
  specifications are outlined.
• Project plan is written up, which includes
  estimates of future development, production, and
  marketing costs along with capital requirements
  and manpower needs.
• A schedule or timetable is also included.
• The project proposal is given to top management
  for a go or no-go decision.

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Product Development

• At this stage the product idea has been evaluated
  from the standpoint of engineering,
  manufacturing, finance, and marketing. If it has
  met all expectations, it is considered a
  candidate for further research and testing. In
  the laboratory, the product is converted into a
  finished good and tested.

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Test Marketing

• Up until now the product has been a company
  secret. Now management goes outside the company
  and submits the product candidate for customer
  approval. Test marketing programs are conducted
  in line with plans for launching the product. At
  this stage, primary attention is given to the
  general marketing strategy to be used and the
  appropriate marketing mix. Test findings are
  analyzed, the product design is frozen into
  production, and a marketing plan is finalized.

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Commercialization

• This is the launching step. During this stage,
  heavy emphasis is on the organization structure
  and management talent needed to implement the
  marketing strategy. Emphasis is also given to
  following up such things as bugs in the design,
  production costs, quality control, and inventory
  requirements. Procedures and responsibility for
  evaluating the success of the new product by
  comparison with projections are also finalized,

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CAUSES OF NEW PRODUCT FAILURE

• Faulty estimates of market potential.
• Unexpected reactions from competitors.
• Poor timing in the introduction of the product.
• Rapid change in the market (economy) after the
  product was approved.
• Inadequate quality control.
• Faulty estimates in production costs.
• Inadequate expenditures on initial promotion.
• Faulty test marketing.
• Improper channel of distribution.

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Need for Research

• In many respects it can be argued that the
  keystone activity of any new product planning
  system is research - not just marketing research
  but technical research as well.
• Regardless of the way in which the new product
  planning function is organized in the company,
  new product development decisions by top
  management require data that provide a base for
  making more intelligent choices.
• New product project reports ought to be more
  than a collection of "expert" opinions.
• Top management has a responsibility to ask
  certain questions, and the new product planning
  team has an obligation to generate answers to
  these questions based on research that provides
  marketing, economic, engineering, and production
  information

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New product management and development some
conclusions

• Most manufacturers cannot live without new
  products. It is common place for major companies
  to have 50 percent or more of current sales in
  products new in the past 10 years.
• Many new products are failures. Estimates of new
  product failure range from 33 percent to 90
  percent.
• Companies vary widely in the effectiveness of
  their new product programs.
• Common elements tend to appear in the management
  practices that generally distinguish the relative
  degree of efficiency and success between
  companies.
• About four out of five hours devoted by
  scientists and engineers to technical development
  of new products are spent on projects that do not
  reach commercial success

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Product life-cycle phase's

• Birth
• Growth
• Maturity
• Decline and death.

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PRODUCT LIFE CYCLE
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Introduction phase(Birth)

• There are usually high production and marketing
  costs and, since sales are only beginning to
  materialize, profits are low or nonexistent.

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Growth stage

• Profits increase and are positively correlated
  with sales as the market begins trying and
  adopting the product.

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Maturation

• Profits for the initiating firm do not keep pace
  with sales because of competition. Here the
  seller may be forced to "remarket" the product,
  which may involve making price concessions,
  increasing product quality, or expanding outlays
  on advertising and sales promotion just to
  maintain market share.

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Decline

• Seller must decide whether to
• (a) drop the product,
• (b) alter the product,
• (c) seek new uses for the product,
• (d) seek new markets, or
• (e) continue with more of the same.

The first stage in the product life-cycle is
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Preliminary classification of forest and tree
products
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ROUNDWOOD

• All round wood felled or otherwise harvested
  and removed. It comprises all wood obtained from
  removals, i.e. the quantities removed from
  forests and from trees outside the forest,
  including wood recovered from natural, felling
  and logging losses during the period, calendar
  year or forest year. It includes all wood removed
  with or without bark, including wood removed in
  its round form, or split, roughly squared or in
  other form (e.g. branches, roots, stumps and
  burls (where these are harvested) and wood that
  is roughly shaped or pointed. It is an aggregate
  comprising wood fuel, including wood for charcoal
  and industrial roundwood (wood in the rough). It
  is reported in cubic metres solid volume
  underbark (i.e. excluding bark).

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WOOD FUEL (INCLUDING WOOD FOR CHARCOAL)

• Round wood that will be used as fuel for purposes
  such as cooking, heating or power production.
• It includes wood harvested from main stems,
  branches and other parts of trees (where these
  are harvested for fuel) and wood that will be
  used for charcoal production. It also includes
  wood chips to be used for fuel that are made
  directly (i.e. in the forest) from roundwood.

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INDUSTRIAL ROUNDWOOD (WOOD IN THE ROUGH)

• All round wood except wood fuel.
• The customs classification systems used by most
  countries do not allow the division of Industrial
  Round wood trade statistics into the different
  end-use categories that have long been recognized
  in production statistics (i.e. sawlogs and veneer
  logs, pulpwood and other industrial roundwood).

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PULPWOOD, ROUND AND SPLIT

• Round wood that will be used for the production
  of pulp, particleboard or fiberboard.
• It includes round wood (with or without bark)
  that will be used for these purposes in its round
  form or as split wood or wood chips made directly
  (i.e. in the forest) from round wood.

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OTHER INDUSTRIAL ROUNDWOOD

• Industrial round wood (wood in the rough) other
  than saw logs, veneer logs and/or pulpwood.
• It includes round wood that will be used for
  poles, piling, posts, fencing, pit props tanning,
  distillation and match blocks, etc.

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WOOD CHARCOAL

• Wood carbonized by partial combustion or the
  application of heat from external sources.
• It includes charcoal used as a fuel or for
  other uses, e.g. as a reduction agent in
  metallurgy or as an absorption or filtration
  medium.

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CHIPS AND PARTICLES

• Wood that has been reduced to small pieces and is
  suitable for pulping, for particle board and/or
  fibreboard production, for use as a fuel, or for
  other purposes.
• It excludes wood chips made directly in the
  forest from roundwood (i.e. already counted as
  pulpwood, round and split).

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WOOD RESIDUES

• The volume of round wood that is left over after
  the production of forest products in the forest
  processing industry (i.e. forest processing
  residues) and that has not been reduced to chips
  or particles.
• It includes sawmill rejects, slabs, edgings
  and trimmings, veneer log cores, veneer rejects,
  sawdust, residues from carpentry and joinery
  production, etc.

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SAWLOGS AND VENEER LOGS

• Round wood that will be sawn (or chipped)
  lengthways for the manufacture of sawn wood or
  railway sleepers (ties) or used for the
  production of veneer (mainly by peeling or
  slicing).
• It includes round wood (whether or not it is
  roughly squared) that will be used for these
  purposes shingle bolts and stave bolts match
  billets and other special types of round wood
  (e.g. burls and roots, etc.) used for veneer
  production.

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SAWNWOOD

• Wood that has been produced from both domestic
  and imported round wood, either by sawing
  lengthways or by aprofile-chipping process and
  that exceeds 6 mm in thickness.
• It includes planks, beams, joists, boards,
  rafters, scantlings, laths, boxboards and
  "lumber", etc., in the following forms unplaned,
  planed, end-jointed, etc.

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WOOD-BASED PANELS

• This product category is an aggregate comprising
  veneer sheets, plywood, particle board, and
  fiberboard.

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VENEER SHEETS

• Thin sheets of wood of uniform thickness, not
  exceeding 6 mm, rotary cut (i.e. peeled), sliced
  or sawn.
• It includes wood used for the manufacture of
  laminated construction material, furniture,
  veneer containers, etc.

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PLYWOOD

• A panel consisting of an assembly of veneer
  sheets bonded together with the direction of the
  grain in alternate plies generally at right
  angles. The veneer sheets are usually placed
  symmetrically on both sides of a central ply or
  core that may itself be made from a veneer sheet
  or another material.
• It includes veneer plywood (plywood
  manufactured by bonding together more than two
  veneer sheets, where the grain of alternate
  veneer sheets is crossed, generally at right
  angles) core plywood or blockboard (plywood with
  a solid core (i.e. the central layer, generally
  thicker than the other plies) that consists of
  narrow boards, blocks or strips of wood placed
  side by side, which may or may not be glued
  together) cellular board (plywood with a core of
  cellular construction) and composite plywood
  (plywood with the core or certain layers made of
  material other than solid wood or veneers).

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PARTICLE BOARD (INCLUDING ORIENTED STRANDBOARD
(OSB))

• A panel manufactured from small pieces of wood or
  other ligno-cellulosic materials (e.g. chips,
  flakes, splinters, strands, shreds, shives, etc.)
  bonded together by the use of an organic binder
  together with one or more of the following
  agents heat, pressure, humidity, a catalyst,
  etc. The particle board category is an aggregate
  category.
• It includes oriented strandboard (OSB),
  waferboard and flaxboard.

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ORIENTED STRANDBOARD (OSB)

• A structural board in which layers of narrow
  wafers are layered alternately at right angles in
  order to give the board greater elastomechanical
  properties. The wafers, which resemble small
  pieces of veneer, are coated with e.g. waterproof
  phenolic resin glue, interleaved together in mats
  and then bonded together under heat and pressure.
  The resulting product is a solid, uniform
  building panel having high strength and water
  resistance.

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FIBREBOARD

• A panel manufactured from fibres of wood or other
  ligno-cellulosic materials with the primary bond
  deriving from the felting of the fibres and their
  inherent adhesive properties (although bonding
  materials and/or additives may be added in the
  manufacturing process).

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MEDIUM DENSITY FIBREBOARD (MDF)

• Fibreboard of a density exceeding 0.5 g/cm3 but
  not exceeding 0.8 g/cm3.

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WOOD PULP

• Fibrous material prepared from pulpwood, wood
  chips, particles or residues by mechanical and/or
  chemical process for further manufacture into
  paper, paperboard, fibreboard or other cellulose
  products.

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PAPER AND PAPERBOARD

• The paper and paperboard category is an aggregate
  category. In the production and trade statistics,
  it represents the sum of graphic papers sanitary
  and household papers packaging materials and
  other paper and paperboard.

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SECONDARY WOOD PRODUCTS
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FURTHER PROCESSED SAWNWOOD

• Wood sawn or chipped lengthwise (including strips
  and friezes for parquet flooring, not assembled)
  and continuously shaped (tongued, grooved,
  rebated, V-jointed, beaded, moulded, rounded or
  the like) along any of its edges or faces,
  whether or not planed, sanded or finger jointed.

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WOODEN WRAPPING AND PACKAGING MATERIAL

• Packing cases, boxes, crates, drums and similar
  packings, of wood cable-drums of wood pallets,
  box pallets and other load boards, of wood
  pallet collars of wood. Casks, barrels, vats,
  tubs and other coopers' products and parts
  thereof, of wood, including staves.

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BUILDERS JOINERY AND CARPENTRY OF WOOD

• Including windows and doors and coverings thereof
  as well as cellular wood panels, assembled
  parquet panels, shingles and shakes.

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WOODEN FURNITURE

• Seats with wooden frames as wooden camping and
  garden seats etc. and parts thereof. Wooden
  furniture other than seats as of a kind used in
  offices, in the kitchen, bedrooms and elsewhere,
  as well as parts of all these.

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PREFABRICATED BUILDINGS

• Log cabins, houses prefabricated from particle
  board.

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Conclusion

• Although product considerations are extremely
  important, remember that the product is only one
  element of the marketing mix. Focusing on product
  decisions alone, without consideration of the
  other marketing mix variables would be an
  ineffective approach to marketing strategy.

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Thank you!