The aim of the sawmills’ marketing and sales is to develop long-term customer relationships.
The prerequisites for that are the good quality of the products, availability and price.
Marketing
The quality, availability and reliability of deliveries all have an effect on how much the customer is prepared to pay for the goods.
The most common competitive advantage over competitors are:
- Quality of goods
- Service, such as availability and reliability
- Price
- Good packaging and presentation
- Speed and accuracy of documentation
- Marketing communication, including advertising, sales
From production-centric to customer-centric
The sales and marketing of sawn goods is nowadays increasingly demand based, instead of being production based. Demand based marketing also takes into account customer needs.
The challenge arises in the production end:
In the sawmilling business the raw material constitutes almost 70% of all costs, the producer will have to take into account the yields, costs and prices for all parts of the production, what to do with the falling products and so on to ensure that the financial yield made from a small batch of specialties is not offset by the reduced prices for the rest of the goods.
This type of approach is not impossible, but it requires long-term commitment from both parties in order to have any chance of succeeding.
Good service
One of the best marketing tools is good service.
Good service include:
- Good availability to regular customers
- Accurate deliveries
- Quick problem solving
- The goods are of agreed quality
- They are produced to the agreed readiness
- Deliveries to the port and onwards to the customers take place as promised.
- The buyers are kept informed about the deliveries
When dealing with a relatively homogeneous product like sawn timber, good and predictable service can easily win you the customer. Customers are also willing to pay for good service.
The development of service, quality and customer orientation succeeds only through committed and knowledgeable personnel.
Marketing communications
Advertising is not commonly used as marketing communication in sawn goods business.
Plain advertising has not been seen as an effective way of marketing to the goods and services, but well conducted everyday actions by the organization yields better results.
Much of the Public Relations work – over and above direct customer contacts – takes place at trade fairs and exhibitions and at specific customer gatherings. This applies especially to the old, established European markets, but on the other hand on the emerging markets like China, India and the Middle East these types of functions have been well received.
Sales personnel
The sales personnel has an important marketing role. The sales people are the front-line contact to the customer, business cards for the company – the image for the producer is largely based on their actions and knowledge.
Once these people have gained buyers’ trust a major step has been taken towards a long-term business relationship.
Sales personnel must have a sound understanding of the markets of wood-based products’, as well as their substitutes and competitive products. It is vital to understand the entire production process from the forest to the end user. On top of that the seller has to understand the requirements and parameters of the end use, and how that may affect the timber product. The seller must be able to guide the customer to choose the right product.
A good sales person aims to sell the entire production he or she is responsible for, and all grades at the best possible price, without overpromising things that cannot be delivered.
Although the sales function is often included to be a part of the marketing – as we did above – one must say that usually in wood products business sales is anyway the primary function and marketing is a tool to achieve the sales.
Prices fluctuate a little bit between various markets, often due to reasons like exchange rates. Furthermore, the contents of the specification have an effect on process.
It must also be noted that sawn goods business is most often conducted between companies (business-to-business) and the buyers are professional people at what they do. These buyers often want to have a personal relationship with the seller, with whom it is easier to conduct the finer details of the business, solve possible problems and discuss new ventures.
