J.T. WassinkJ.T. Wassink is with the Royal Tropical Institute, Amsterdam.
Timber marketing involves analysis of information, understanding transport, storage and industrial technology, gaining the confidence of buyers and creating new markets for unknown species of wood
Everybody knows more or less what the word marketing means, but not everybody realizes that in the field of distribution of goods from producer to consumer it stands for a series of actions such as collecting, grading, sorting, storing, transportation and contacting the client, all leading to the ultimate goal: effecting a sale.
The sale is the important factor, but when the prerequisites are not efficiently handled the sale never materializes or leads to disappointments for both the seller and the buyer. With this in mind, I would like to analyse the consequences of the different actions which go into the marketing process for imported timber.
What should be collected? Timber, surely, but the potential choice is so wide that we need yardsticks to decide what kind of timber to purchase. Therefore we have to investigate what the consumer wants.
For the bulk of timber at present used some of the most desirable properties are:
1. It should come from large trees, thus promoting efficiency during sawing.2. It should be available in quantity. Since this concerns bulk, the turnover may consequently become very large.
3. It should have reasonably high mechanical/physical properties.
4. The workability should be good.
5. Less stringent, but still of great importance, it should preferably have a coarse grain.
6. Although different markets have different wishes, there is a general preference for reddish-brown timbers. Golden yellow is also much in demand and pays a premium.
7. Radial and tangential shrinkage should be minimal or at least in proportion to each other.
8. It should have an attractive figuration. This is a subjective factor which differs with markets and fashions.
Timbers that do not comply fully with the above list can also be sold, but the outlets for them are in selective markets only. These markets have to be scouted out or created. Local or known uses can be a good starting point. It is too often forgotten that a market can be created, either by using imagination or by convincing a customer who has specific demands to put aside some of his specifications. In such cases low price is a major factor, such as when a sawmill has a lot of so-called waste (sapwood, for instance) that can be sold at a minimum price. A good deal of imagination and initiative is important here.
Besides knowing what to collect, it should be decided where to collect. Ideally, one should collect as near as possible to the place of arrival of the shipment. The price of the timber and the price of transportation are important. Collecting in a concentrated area is preferable to collecting at scattered points, since transport is then easier to organize and cheaper with bulk handling.
Collecting should be done in good time, the goal being to accumulate a good store of merchandise in order to guarantee prompt delivery.
The man who buys the timber in the forest should have a thorough knowledge of the type of timber his organization is able to sell. He should know a great deal about the specific demands for the timber from the point of view of the industry working the timber. He should always realize that, in fact, he is buying timber for the consumer.
The transportation flow should be regular and steady, with the fewest possible interruptions. Only in this way can the organization of harvesting, transportation and handling at the receiving point be an efficient operation. This includes the realization that climatic conditions may influence the operation strongly and the organization should be flexible enough to turn smoothly to alternative possibilities. The provision of adequate and reliable means of transportation is an important part of this flexibility.
TIMBER BEING MOVED INTO A LOADING POSITION IN THE BRAZILIAN PORT OF CANTOS please come on time
Timber marketing involves analysis of information, understanding transport, storage and industrial technology, gaining the confidence of buyers and creating new markets for unknown species of wood
Delivery from storage should be on a "first in, first out" principle in order to prevent degrading of the merchandise through long storage. It may be necessary to prevent degrading by artificial means, such as water-sprinkling installations or the chemical control of fungi and insects. The storage place also needs to be protected against theft and fire.
Good storage requires a fair amount of investment which bears no interest during the period of storage.
During storage a good sorting and grading system should be maintained. Yardsticks for sorting and grading are a consequence of the type of merchandise handled and the wishes of the customer. Prompt reaction to the demands of the customer should be the goal.
Transportation to the client in the tropical timber trade means covering long distances, nearly always by ship.
It be realized that the bigger the amount of cargo offered the better the position of the shipper is to negotiate freight rates. Cooperation between shippers strengthens this position. The overall efficiency of the shipper is of importance and influences the coming to terms and prices. Such efficiency consists in the merchandise being available for loading at the right place and at the right time, with all administrative paperwork completed and the cargo in a condition that makes loading as easy as possible.
The customer will demand shipping on time; to him the time of delivery is of the utmost importance as his whole scheme of re-selling and, as a consequence, the production scheme of the industry using the timber, depends on the delivery time schedule. Or, to put it the other way around: the manufacturing programme influences the time of importation, which fixes the ultimate time of shipping.
The conduct of business is based on a certain amount of mutual trust between buyer and seller. But such an affinity has to grow, and this takes time. Eventually it develops to a certain extent into an interdependence between the two parties.
The seller, in his search for clients, tries to put forth the image of a solid businessman, and, of course, this should not be just an image, it should be a fact. Especially in the initial contacts, the potential client should be impressed by this. An open approach, based on trust, is usually a good starting point.
Contacts can be made: (1) directly, through a personal approach; (2) via an introduction through a mutual acquaintance, which already establishes a certain trustworthiness; (3) directly through group presentation, such as missions, fairs, special shows.
It is of extreme importance that the contacting salesman should be equipped with a thorough background concerning what he is selling and how business should be conducted; otherwise he will be seen as "another amateur," not to be taken seriously.
Timber importers expect contracts and agreed prices to be kept, delivery dates met and quality and quantity to be as specified. All of this is vital to the importer because the moment he signs a contract he starts selling the timber, which still may not have been felled in the forest. Some importers distrust government export organizations because, they say, they have had poor experience with regard to agreed conditions not being met as a result of local political factors.
Through gathering a maximum amount of information, and by analysing and studying it, the seller has to form an opinion about his timber, the price at which he can afford to sell it and where he can be competitive in the market.
He goes about this task by gathering the following information:
1. Statistics on volume and species of timber consumed, and prices in a specific market. It is not easy to procure statistics and information linking species to price. Conversion factors for roundwood to plywood, sawnwood, etc., are also necessary. The same applies to prices: for roundwood to sawnwood a factor 1.8 has been useful, at least until now.2. Economic reviews of world or local situations.
3. Trade and investment information from newspapers and professional magazines. For example, trends of building activity in certain countries and, in particular, of wood-using industries, such as furniture production.
4. Political situations within and between countries; for instance, political developments which may influence economic affairs in the field in timber-producing countries, in the countries of competitors, in the countries of buyers.
5. Government rules on exports and imports.
6. Shipping possibilities and rates.
7. Specific information that can be gathered from personal contacts.
Having gathered information, the importer bent on selling his timber must analyse it. In this analysis he looks for the following:
1. What are the characteristics of particular timbers sold in bulk in a particular market: general properties, physical/mechanical properties, workability, etc.?2. What are the main uses for these timbers: construction, furniture, finished or semifinished products?
3. What is the price level (f.o.b. or c.i.f.) for this bulk timber?
4. What are government plans in any given market for housing and construction, industrialization, road building, energy and energy costs, and how may timber fit into these plans?
5. Who are the established competitors? What type of timber (or competitive nonwood material) do they sell, and at what prices? What is their situation regarding shipping rates'? How efficient are they in business? Where can their inefficiencies be taken advantage of?
6. Are there any agencies in this market that can assist in timber and wood product promotion through advertising, trade fairs, the assistance of government offices or trade organizations?
7. Is it possible to compose or procure a list, as complete as possible, of the wood products made in the area? 8. Are the customer's specifications really necessary or are they debatable in view of other qualities inherent in the available timber? Can the buyer be convinced to relax or change his specifications by offers of timber at a cheaper price?
9. What problems may the customer have with his present base material? Can a solution be provided?
10. Based on the list of products (point 7), where would the timber which is being offered for sale best be suited?
The point of all that has been said is that the men in charge of marketing timber need to have, in addition to good business sense, a broad approach toward placing timber and wood products on the market, a grasp of the technology of wood-based industries, the ability to gather and analyse information of various kinds which influences the market in different ways, and, most of all, a creative and not a static conception of the work.
