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Marketing Being Shaped by Public Perception of Wood, Environment
The marketing of wood products is definitely not what it used to be.
Date Posted: 6/26/2002
The marketing of wood products is definitely not what it used to be.
There may have been at least a few ducktail combs in the audience as Dr. Robert (Bob) Bush of Virginia Tech recently reviewed four major trends impacting the wood products market place. He spoke at the 2nd annual conference of the Wood Container Technology Coalition in Atlanta.
In Bob’s work at Virginia Tech, he has looked at a variety of wood product markets over the years, including pallets and containers. When it comes to identifying trends, the issue of environmental awareness is a "no-brainer," he said. "The trend is environmental awareness, and the opportunity for you is environmental marketing."
For lack of a better date, the environmental movement started around 1970 with the first Earth Day. Suddenly, people started thinking more about the environment.
Bob suggested that while many of the wood container suppliers at the conference truly believe that "wood is wonderful," they must recognize that for many, particularly those in the environmental movement, wood is not wonderful. "In fact, it is the opposite," Bob said, showing a slide that read, ‘Wood is murder.’ "I didn’t make this stuff up. It is right off the Greenpeace Web site."
There are two main reasons why the public has a bad perception about wood as an industrial material, he noted. First, they don’t know the difference between renewable and recyclable. "You will notice," Bob said, "that a lot of time when we promote wood as an industrial material, what do we say? ‘It’s renewable!’ You can use all you want, and we can grow more." The latter part of the message does not get across, however, because people do not differentiate between renewable and recyclable products. "If they could carry it out to the curb and have it hauled away, it would be okay." Promoting wood as a good material because it is renewable has no effect, he said.
The second concern is the lack of connection people have with the products they consume. This results from a population that is increasingly urban and is compounded by the fact that a vast majority of people consider themselves to be environmentalists. "How can you write on paper and live in a wood house and not want to cut down trees?" Bob asked. The answer, Bob observed, is that it makes perfect sense if consumers do not connect the product with the raw material. "If you don’t make that connection, it is perfectly logical to want a wood house but never want to cut down a tree. It is perfectly logical then, that we don’t want to cut down a tree in this country, yet use four times the wood fiber, per capita, of any other country in the world."
Bob recalled a Wall Street Journal article in April 1998 that lambasted wood pallets. He had spent hours talking to the reporter by phone, explaining how wood packaging and pallets are recycled, and how the recycling rate is greater than metals or plastic or paper. Pallet recycling is an example of how to do things right in terms of recycling and conserving natural resources.
When it was published, the article proclaimed wood pallets an eco-menace. Bob learned two things from this. One, he joked, was to never talk to reporters. The other was that you are not going to change opinions. "You are better off looking at how you can use current opinions to meet your goals," he said.
One example of the failure of scientific evidence to sway public perception is Life Cycle Analysis, which quantifies the overall environmental impacts of industrial materials from cradle to grave. In Europe, many studies have dealt with the issue of what industrial material is best for the environment. "Sometimes wood wins," Bob said, "sometimes metal, sometimes concrete."
Sooner or later, when comparing wood to any other material, one has to equate a tree with a barrel of oil. "And you can’t, because people don’t care about holes in the ground, but they sure care about cutting down trees."
Quantitative data that proves that a certain material is better is ultimately worthless. Consumers make up their mind based on their perception, and their perception is that they would rather extract a barrel of oil from the ground than cut down a tree. "My kids go play in the forest, but they don’t go play in the oil field. You can see the logic," Bob said. "You are not going to change it."
Bob believes that one way to market to this perception is through certification of wood products. Certification will succeed for two key reasons, he said. First, big box retailers and others who want it will not pay the cost of certification; for them it will be a no-cost feature. Second, the public is looking for an easy answer. Certification of wood products is attractive to a consumer who wants to act environmentally responsibly yet realistically does not have time to research the products he buys.
Certification will not just be demanded by consumers, Bob noted. It might start off being just consumer markets, but industries also are concerned about their public image. "That concern," Bob said, "will translate one day into them asking for wood products made from certified sources."
Certification of wood recovered from the waste stream is another area where Bob believes wood products suppliers should look for opportunity. Virginia Tech research has revealed a 300% increase in recovered solid wood used for pallets and containers between 1992 and 1999, while new wood consumption has been largely level between 1995 and 1999.
Certification agencies have expressed interest in working with industry to certify recovered materials. "So if you can make a product out of recovered materials, it doesn’t have to come out of a forest to be certified," Bob summarized. "You can simply prove that it is recovered from the waste stream."
Moving beyond environmentalism, another key trend impacting the forest products industry is globalization. The U.S. has been both blessed and cursed with the best resources in the world and the biggest, fastest growing market. As a result, the U.S. never developed much competitiveness for export markets. Now, however, competition is intense. Wood products are shipped all over the world for a number of reasons, including elimination of trade barriers, cheap ocean transport, surplus products in other countries, and the strong U.S. dollar. "One of the trends I see is that there is going to be more and more competition from oversees," Bob said, "and more and more supply from overseas."
Another trend is towards alternative materials. Bob identified mature and emerging alternative materials such as corrugated, radiata pine, plastic, plastic composites, and plantation grown eucalyptus.
Wood container suppliers have seen business eroded in markets such as agricultural bins, where customers have given plastic a hard look. "This (alternative material trend) will affect the pallet and container industry big time," Bob said. "It will affect other products, but you folks are on the cutting edge of this."
Many if not most wood packaging suppliers already make use of a range of alternative materials for panel walls, vapor barriers, and cushioning, etc., depending upon the requirements of the application. Wood, however, with its benefits of strength, low cost and light weight, provides best value for a range of applications.
When it comes to marketing wood products, is Elvis in the building? Bob noted one way to reach the customer is through more sophisticated "total product" marketing. Vaughan Basset furniture company recently launched an Elvis Presley line of furniture that appeals to more than just comfort and appearance. The new line has enjoyed very strong sales so far, and it was picked up by every account targeted at a recent trade show. And Vaughan Bassett is not alone. Other hot furniture lines include Arnold Palmer-inspired armoires and Ernest Hemingway-inspired beds.
"Marketing is becoming more important in where you find your competitive advantage," Bob said. Will we see a line of General George Patton-inspired armament containers in the future? Perhaps that would be a stretch.
The growing influence of marketing is the trend that Bob believes is most influential and most important. New sources of competitive advantage, evolving distribution systems and electronic business are three key factors. Some of the strategic positions a company can take to improve its competitive position include segmenting the market, marketing the "total product," product differentiation, new distribution methods and "value" pricing.
The wood products industry, as other industries, has seen trends in distribution such as blurring of traditional functions, brand identification, end user promotions, the ‘big box’ phenomenon, third-party distribution, and more. These evolving distribution systems have emerged in an attempt to tap competitive advantage from that area of operations and will increasingly require better information systems to power.
Electronic business is key to successful supply chain management as well as marketing. But it will go beyond just selling on the Internet, Bob stated. It is selling in the Internet. Electronic business, just like the enduring appeal of Elvis, will be pervasive.
So ‘don’t be blue’ about negative perceptions about wood. Pay attention to the trends and ‘go cat go.’