FORESTRY WOOD PRODUCTSAssoc. Prof. Dr. Nickola StoyanovUniversity of ForestrySofia, Bulgaria

structure of a product

Base useIn 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

Generic ProductQualitySpecial characteristicsBranchStylePacking

Expected productPlacement (distribution)PriceInstallationServiceGarantee

Augmented productAdditional benefits

DEFINITION OF THE PRODUCTProduct 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.

Product ClassificationAgricultural 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.

Product ClassificationConsumer goods: a.Convenience goods, such as food, which are purchased frequently with minimum effort. Impulse goods would also fall into this category. 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.

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

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.

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product that offers improved performance of an existing function, such as a wristwatch whose balance wheel has been replaced by a tuning fork.A product that is a new application of an existing product.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.

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.

The New product Development Process Idea generationIdea screeningProject planningProduct developmentTest marketingCommercialization

Idea GenerationEvery 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.

Idea ScreeningThe 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.

Project PlanningThe 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.

Product DevelopmentAt 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.

Test MarketingUp 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.

CommercializationThis 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,

CAUSES OF NEW PRODUCT FAILUREFaulty 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 ap proved.Inadequate quality control.Faulty estimates in production costs.Inadequate expenditures on initial promotion.Faulty test marketing.Improper channel of distribution.

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

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

Product life-cycle phase's Birth; Growth; Maturity; Decline and death.

PRODUCT LIFE CYCLE

Introduction phase(Birth) There are usually high production and marketing costs and, since sales are only beginning to materialize, profits are low or nonexistent.

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

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.

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

Preliminary classification of forest and tree products

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).

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.

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).

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.

OTHER INDUSTRIAL ROUNDWOODIndustrial 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.

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.

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).

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.

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.

SAWNWOODWood 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.

WOOD-BASED PANELS

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

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.

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).

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.

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.

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).

MEDIUM DENSITY FIBREBOARD (MDF) Fibreboard of a density exceeding 0.5 g/cm3 but not exceeding 0.8 g/cm3.

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.

PAPER AND PAPERBOARDThe 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.

SECONDARY WOOD PRODUCTS

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.

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.

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.

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.

PREFABRICATED BUILDINGS Log cabins, houses prefabricated from particle board.

ConclusionAlthough 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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