The document discusses various marketing strategies that companies in the panel and engineered lumber industry can employ. It provides numerous examples of different types of strategies including commodity-based, geographic, new product development, diversification, acquisition, sales approaches, adding services, integration, exporting, focusing on speed or quality, and targeting specific markets. The strategies discussed range from broad approaches to more niche tactics. Overall, the document emphasizes that there is no single best strategy and companies may employ multiple strategies simultaneously if properly aligned internally.

1. MARKETING STRATEGY IN A
ROTTEN YEAR
 PANEL & ENGINEERED LUMBER
INTERNATIONAL CONFERENCE & EXPO
 9 FEBRUARY, 2008
 LEONARD M GUSS, PH D
 PRESIDENT, LGA INC
 www.LGA-INC.net

2. EXAMPLES OF STRATEGIES:
COMMODITY
 MEETS A PUBLISHED STANDARD
 BUT EVEN WITHIN STANDARDS & GRADES
THERE IS VARIANCE
 MARKET DETERMINED PRICE
 LOW COST ESSENTIAL
 MINIMAL SUPPORT
 GOOD CLAIMS PROCEDURE
 CAN CHOOSE WHICH SIZES, DIMENSIONS
 BEST MANUFACTURING PRACTICES
ESSENTIAL FOR MAXIMUM REALIZATION
LGA INC

3. EXAMPLES OF STRATEGIES:
GEOGRAPHIC
 LIMITED REACH BY FREIGHT
 LIMITED REACH BY MARKET
PREFERENCE
 MATCH PRODUCTION TO
DISTRIBUTORS WHO ARE USUALLY
REGIONAL
 SUPPORT DEPENDS ON PRODUCT MIX:
COMMODITY OR SPECIALTY
LGA INC

4. WHAT IS A STRATEGY?
 YOU HAVE ONE, WILLINGLY OR NOT
 HOW YOU APPROACH YOUR
CUSTOMERS, THE COMMITMENTS YOU
MAKE, THE EXPECTATIONS YOU HAVE
 OFTEN EXPRESSED AS ‘POLICIES’
LGA INC

5. EXAMPLES OF STRATEGIES:
NEW PRODUCT & R&D
 MINOR MODIFICATIONS: EASED EDGES,
DRILLED STUDS, SCREENBACK OSB, OFTEN
CALLED VALUE-ADDED
 MAJOR ADDITIONS: WOOD I-JOISTS, LVL,
OVERLAID OSB
 NEW PRODUCTS: FIRE RETARDANT OSB;
METAL OR PLASTIC LAMINAE IN
GLULAMS; PSL; PSB
 R&D AT PRODUCER LEVEL MOST
SUCCESSFUL WITH PRODUCT
DEVELOPMENT, LEAST SUCCESSFUL WITH
BASIC RESEARCH
LGA INC

6. EXAMPLES OF STRATEGIES:
DIVERSIFICATION
 IN-HOUSE OR ACQUISITION
 RELATED PRODUCTS: FROM LVL TO
WOOD I-JOISTS; FROM OSB TO SIP;
COMPONENTS
 UNRELATED PRODUCTS, SAME MARKETS:
ADD WOOD/PLASTIC; ACQUIRE DIFFERENT
WOOD BUSINESS
 UNRELATED PRODUCTS, DIFFERENT
MARKETS: AUTOMOBILE VS HOUSING
 THE FURTHER AFIELD THE
DIVERSIFICATION THE HIGHER THE ODDS
AGAINST SUCCESS

7. EXAMPLES OF STRATEGIES:
ACQUISITION & MERGER
 EVEN WHEN COMPLEMENTARY FRAUGHT
WITH HAZARDS: DIFFERENT CULTURES,
DIFFERENT ACCOUNTING SYSTEMS,
DIFFERENT COMPENSATION; DIFFERENT
MANUFACTURING; DIFFERENT
MARKETING.
 MANY UNFORESEEN THINGS ARISE TO
BITE YOU
 DON’T COUNT ON ACQUIRED
MANAGEMENT: THEY USUALLY LEAVE TO
‘PURSUE OTHER OPTIONS’.
LGA INC

8. EXAMPLES OF STRATEGIES:
SELLING
 COMMODITIES REQUIRE
TELEPHONE SELLING
 SPECIALTIES REQUIRE PERSONAL
CALLS: BUYERS, SPECIFIERS,
INFLUENCERS
 EVEN COMMODITIES BENEFIT FROM
PERSONAL CALLS BY MANAGEMENT
 SPECIALTIES REQUIRE
CONSIDERABLE MARKET SUPPORT
LGA INC

9. EXAMPLES OF STRATEGIES:
ADDING SERVICES
 DEVELOPING APPLICATION SOFTWARE
 ENGINEERING HELP
 MARKETING SUPPORT: WITH CUSTOMERS’
CUSTOMERS, INFLUENCERS, SPECIFIERS
 PROPER MARKETING TOOLS, ESPECIALLY
FOR EXPORT
 SPECIAL CASE FINANCING EQUIPMENT
LGA INC

10. EXAMPLES OF STRATEGIES:
INTEGRATION
 VERTICAL: FOR MANUFACTURERS
ACQUIRING TIMBER, DISTRIBUTION
 BUT CURRENTLY DIS-INTEGRATION:
SELLING TIMBERLANDS & DISTRIBUTION
 HORIZONTAL: ACQUIRING COMPETITIVE
OR RELATED COMPANIES TO EXPAND
PRODUCTION OR SALES OR ACQUIRE
EXPERTISE
 BUT WATCH OUT: KEY PERSONNEL MAY
NOT WANT TO BE ACQUIRED
LGA INC

11. MILITARY ANALOGIES
 WE’RE IN LOVE WITH THESE: WE FIGHT
COMPETITION; WE HAVE ‘ROAD WARRIORS’;
WE MEET CHALLENGES
 STRATEGY EXPRESSES OUR DIRECTION
 TACTICES HOW WE PLAN TO GET THERE
 THESE ARE NOT ‘VISION STATEMENTS’
 REMEMBER, WHEN LOU GERSTNER TOOK
OVER A BADLY BATTERED IBM IN 1993 HE
SAID “THE LAST THING WE NEED IS
ANOTHER VISION STATEMENT’
LGA INC

12. EXAMPLES OF STRATEGIES:
EXPORT
 DOMESTIC AGENT
 IMPORT AGENT
 METRIC SIZES
 COUNTRY INFORMATION
 TRADE ASSOCIATIONS
 US EMBASSY
 SPECIAL AGENCIES
 LOCAL PARTNERS
 KNOW THE LANGUAGE
 NO IN & OUT; EXPORT IS FOR THE LONG HAUL OR
YOU WILL WEAR OUT YOUR WELCOME
LGA INC

13. EXAMPLES OF STRATEGIES
CHEAPEST
 LOWEST COST
 MODERN, EFFECTIVE EQUIPMENT
 FREQUENT REINVESTMENT
 SHORT PRODUCT LINE
 LONG RUNS
 MINIMAL MARKET, TECHNICAL SUPPORT
 SHORT DISTRIBUTION CHAIN
 CONTROLLED SHIPPING
LGA INC

14. EXMPLES OF STRATEGIES:
FASTEST
 24/7 RESPONSE MECHANISM
 CONTROL OR EFFECTIVE DELIVERY SYSTEM
 EFFECTIVE IN-HOUSE ORDER SYSTEM &
SCHEDULING
 ADEQUATE INVENTORIES & EQUIPMENT
 NEVER MAKE PROMISES YOU CAN’T KEEP:
INTEGRATED SALES & PRODUCTION INFO
LGA INC

15. EXAMPLES OF STRATEGIES:
HIGH QUALITY
 Up-to-date precision equipment
 Top raw materials with close specs
 Severe quality control
 Marketing & Technical support
 Sales people trained in end uses as well as
product properties
LGA INC

16. BE CAREFUL THINKING
OUTSIDE THE BOX

17. DO STRATEGIES EVER
CHANGE?
 DISTINGUISH BETWEEN CHANGING
STRATEGIES & TACTICS
 CHANGES RUNS THROUGH ALL THE
SYSTEM, CAUSES TREMORS
 CHANGE WHAT YOU MAKE, HOW
YOU SELL, TO WHOM YOU SELL
 HARD TO BALANCE CHANGE; REAL
PROBLEMS IF SALES CHANGES &
PRODUCTION DOES NOT
LGA INC

18. CAN YOU EVER CHANGE
BACK?
 CONFUSES EVERYBODY
 USELESS NEW EQUIPMENT?
 LEARNING CURVE
 LOSE TRUST? OFFEND CUSTOMERS?
 INVENTORY BUILD-UP ODDS & ENDS
 PERSONNEL CHANGES; PEOPLE
BETTER AT ONE WAY THAN
ANOTHER
LGA INC

19. FREQUENT CHANGES AFFECT
EMPLOYEES
 PLAN A: CHANGE TO CENTRALIZED
DECISION MAKING: FIELD PEOPLE
LOSE AUTHORITY, INITIATIVE, MUST
PLAY GAMES.
 PLAN B: CHANGE TO
DECENTRALIZED DECISION MAKING:
LOSE CONTROL, OPERATE AT CROSS
PURPOSES, LOSE COMMUNICATION
BETWEEN REGIONS, HOME
LGA INC

20. SOME COMPANIES STRATEGY
CYCLES
 PLAN A PLAN B
LGA INC

21. EXAMPLES OF STRATEGIES:
SOCIAL & ENVIRONMENTAL
 CERTIFYING TIMBERLANDS
 CHAINS OF OWNERSHIP
 AVOIDING SOME SOURCES
 BEST MANUFACTURING PROCESSES,
CONTROLLING EMMISSIONS,
POLLUTANTS
 USING RESIDUES FOR PRODUCTS,
POWER
 CORPORATE CONTRIBUTIONS
LGA INC

22. EXAMPLES OF STRATEGIES:
SPECIALTIES
 OFTEN BROAD ARRAY OF PRODUCTS
 COATED PANELS, CTS, COMPONENTS
 SPECIAL RAW MATERIALS: CEDAR
 SPECIAL DESIGNS: VARYING WOOD I-
JOISTS FOR RESIDENTIAL, COMMERCIAL
 SIP (STRUCTURAL INSULATED PANELS)
 HANDLE SMALL ORDERS, FREQUENT
MACHINE CHANGES, PRICE ACCORDINGLY
 REQUIRES STRONG MARKET SUPPORT
LGA INC

23. EXAMPLES OF STRATEGIES:
JOB SHOP
 EXCELLENT ORDER & INVENTORY
CONTROL
 SPECIALZED SALES FORCE
 RAPID RESPONSE
 MARKET & TECHNICAL SUPPORT
 COMFORTABLE WITH SMALL
ORDERS, SPECIAL DESIGNS
LGA INC

24. HOW MANY STRATEGIES CAN I
HAVE AT THE SAME TIME
 ANY NUMBER SO LONG AS THEY DON’T
CONFLICT.
 MANY COMPANIES HAVE CONFLICTING
POLICIES & STRATEGIES, E.G. ACCEPT
SPECIAL ORDERS BUT COMPENSATE ON
VOLUME; PROMISE FLEXABILITY BUT
PUSH SMALL ORDERS ASIDE
 IN AND OUT OF MARKETS, ESPECIALLY
EXPORT!
LGA INC

25. EXAMPLES OF STRATEGIES:
ADDING MARKETS
 RESIDENTIAL: VIA BUILDING
MATERIAL DISTRIBUTORS
 COMMERCIAL: YOU NEED TRAINED
PEOPLE WITH ARCHITECTURAL
AWARENESS
 INDUSTRIAL: KNOWING THE
INDUSTRY JUST AS IMPORTANT AS
KNOWING YOUR PRODUCT
LGA INC

26. CLASSIC SUCCESSES IN WOOD
PRODUCTS
BUT NOTHING IS FOREVER
 TRUSJOIST – ESTABLISHED TECHNICAL
SELLING
 LP – MANY THINK THEY INVENTED OSB
 MACMILLAN BLOEDEL – PARALLAMR
 APA-THE ENGINEERED WOOD
ASSOCIATION – SURVIVED, GREW &
EXPANDED FROM DOUGLAS FIR
PLYWOOD ASSOCIATION
LGA INC

27. STRATEGIC FAILURES IN
WOOD PRODUCTS
 BYPASSING THE WHOLESALER BUT NOT
THE FUNCTION
 TIMBER SUPPLY FROM FEDERAL FORESTS
 CONVERSION TO SMALL TIMBER
 INTRODUCING NEW PRODUCTS W/O
ADEQUATE LONG TERM TESTING
 FAILURE TO RECOGNIZE SHRINKING
MARKETS FOR COMMODITY PRODUCT
LGA INC

28. SUMMING UP 1
 THERE IS NO ONE WAY TO A SUCCESSFUL
STRATEGY. RUDYARD KIPLING WROTE
“THERE ARE 9 & 60 WAYS OF
CONSTRUCTING TRIBAL LAYS, & EVERY
SINGLE ONE OF THEM IS RIGHT”.
 BUT: STRATEGIES MUST BE INTERNALLY
CONSISTENT & NOT CONTRADICTORY;
 STRATEGIES MUST TAKE INTO ACCOUNT
THE REALITIES OF PLANT, RAW
MATERIALS, STAFF AND MARKETS; VISION
STATEMENTS WON’T DO.
LGA INC

29. SUMMING UP 2
 STRATEGIES MUST NOT SET ONE
GROUP AGAINST ANOTHER
 CHANGING STRATEGIES IS
PERILOUS; DON’T DO IT OFTEN
 IF/WHEN YOU CHANGE STRATEGIES
MAKE SURE YOU ALSO CHANGE ALL
THE SUPPORTING & RELATED
PROCEDURES

30. SUMMING UP 3
 AVOID COOKIE-CUTTER SOLUTIONS: E.G.
PLAN A TO PLAN B OR PLAN B TO PLAN A
 NOTHING WRONG WITH BEING A
CONTRARIAN
 THERE ARE NICHE MARKETS
EVERYWHERE
 REMEMBER YOUR CUSTOMERS SURVIVE
ON THEIR CUSTOMERS: LOOK AHEAD

31. MARKETING SUPPORT TAKES
MANY FORMS
 MEDIA, BROCHURES, COMPLETE
TECHNICAL DATA, SOFTWARE,
OTHERS
 KNOW CUSTOMERS’ CUSTOMERS
 SPECIFIERS & INFLUENCERS
 HELP WITH CUSTOMERS ISSUES IF
YOU CAN
 A MANAGEMENT PRESENCE
 FAIR CLAIMS POLICY
LGA INC

32. EXAMPLES OF STRATEGIES:
INTEGRATED COMPANY
WHAT IS THE FUNCTION OF DISTRIBUTION? TO
SELL WHAT PRODUCTION MAKES? OR TO MAKE
A PROFIT?
MOST COMPANIES HAVE COME TO GRIEF ON
THIS ISSUE. ONLY WEYERHAEUSER, BOISE
HAVE SIGNIFICANT DISTRIBUTION
LGA INC