Viability of Group Marketing of Farm Forestry Timber

The SMARTimbers exampleRIRDC Publication No. 08/112

Viability of Group Marketing of Farm Forestry Timber

− the SMARTimbers example −

A report for the RIRDC/L&WA/FWPRDC Joint Venture Agroforestry Program

by Gib Wettenhall

September 2008

RIRDC Publication No 08/112 RIRDC Project No STM-1A

© 2008 Rural Industries Research and Development Corporation. All rights reserved. ISSN 1440-6845 ISBN 1 74151 700 1 Viability of group marketing of farm forestry timber Publication No. 08/112 Project No STM-1A The information contained in this publication is intended for general use to assist public knowledge and discussion and to help improve the development of sustainable regions. You must not rely on any information contained in this publication without taking specialist advice relevant to your particular circumstances.

While reasonable care has been taken in preparing this publication to ensure that information is true and correct, the Commonwealth of Australia gives no assurance as to the accuracy of any information in this publication.

The Commonwealth of Australia, the Rural Industries Research and Development Corporation (RIRDC), the authors or contributors expressly disclaim, to the maximum extent permitted by law, all responsibility and liability to any person, arising directly or indirectly from any act or omission, or for any consequences of any such act or omission, made in reliance on the contents of this publication, whether or not caused by any negligence on the part of the Commonwealth of Australia, RIRDC, the authors or contributors..

The Commonwealth of Australia does not necessarily endorse the views in this publication.

This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, all other rights are reserved. However, wide dissemination is encouraged. Requests and inquiries concerning reproduction and rights should be addressed to the RIRDC Publications Manager on phone 02 6271 4165.

Researcher Contact Details Gib Wettenhall 15 Dawson St Sth, Ballarat VIC 3350 Phone: 03 5334 4643 Fax: 03 5364 2911 Email: gib@netconnect.com.au

In submitting this report, the researcher has agreed to RIRDC publishing this material in its edited form. RIRDC Contact Details Rural Industries Research and Development Corporation Level 2, 15 National Circuit BARTON ACT 2600 PO Box 4776 KINGSTON ACT 2604 Phone: 02 6271 4100 Fax: 02 6271 4199 Email: rirdc@rirdc.gov.au. Web: http://www.rirdc.gov.au Published in September 2008 by Union Offset

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Foreword The market research undertaken in this project sought to test and adapt a single desk marketing structure developed by SMARTimbers Cooperative Ltd. The SMARTimbers model is premised on delivering higher returns to farm foresters for their local specialty timbers by producing sustainably sourced, high value products that match the market and better meet the needs of architectural firms working in ‘top end’ market segments. This alternative marketing model is suited to farm foresters around Australia and to the nature of their tree growing. It has the potential to deliver higher returns to farmers than existing marketing models applied elsewhere. The market research confirmed that small (up to 5 employees) and medium scale architectural firms (5-20 employees) provide a good fit for marketing approaches from farm forestry groups. These firms and their clients have a high degree of interest and empathy in sourcing traceable, local, farm forest products and unique, different specialty timbers. The research also confirmed that a professionally produced website extends market reach, with two-thirds of architects surveyed citing the internet as a primary source for product information. Architects claimed that by and large their clients were more interested in ‘the look’ of a product than its sustainability. Sustainability on its own was rarely the main driver. Purchase decisions result from a mix of factors including price, appearance and technical performance. Builders, in particular, act as a barrier to specifying sustainable products, as price acts as the major criterion on which they base their purchasing decisions. Even local government and government agencies demonstrated a disconnect in their purported preference for Australian sustainable timber products and their actual purchasing actions. The report recommends designing educational material suitable for architectural and building courses in all states to explain and promote the sustainable benefits of specifying Australian hardwood timber products. This project was funded by the Joint Venture Agroforestry Program (JVAP), which is supported by three R&D corporations – Rural Industries Research and Development Corporation (RIRDC), Land & Water Australia (L&WA), and Forest and Wood Products Research and Development Corporation (FWPRDC). The R&D corporations are funded principally by the Australian Government. This report is an addition to RIRDC’s diverse range of over 1800 research publications. It forms part of our Agroforestry and Farm Forestry R&D program, which aims to integrate sustainable and productive agroforestry within Australian farming systems. The JVAP, under this program, is managed by RIRDC. Most of our publications are available for viewing, downloading or purchasing online through our website: • downloads at www.rirdc.gov.au/fullreports/index.html • purchases at www.rirdc.gov.au/eshop Peter O’Brien Managing Director Rural Industries Research and Development Corporation

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Research team Principal investigator and project manager: Gib Wettenhall, BA/LLB, Monash University; founding director and secretary, SMARTimbers Cooperative Ltd; treasurer Ballarat Region Treegrowers; editor of Australian Forest Grower. Former researcher with Victorian Ministry of Housing and senior researcher with the Victorian Registry of Cooperatives. Experience in market survey design and analysis as a principal of social research company, Equasearch Pty Ltd. Clients included Melbourne City Council, Ministry of Housing and the Australian Greenhouse Office. Co-author with Henderson, Ross, Farmwood Australia – export markets for home-grown wood, RIRDC Short Report 127, 2003. Market survey interviewer: Nolline Williams, Bachelor of Business, majoring in Marketing, Monash University; Cellar Door Manager, Yellowglen Winery; Administration Officer, City of Ballarat. Part-time Marketing Officer with SMARTimbers for the past three years. Market research analysis: Millward Brown Australia’s (MB) ultimate parent company is WPP, the largest marketing services provider in the world. MB’s data processing facilities are among the largest employed by any research agency in Australia. Expert independent farm forestry and marketing reviewer: Dr Digby Race, principal researcher, Institute for Land, Water and Society, Charles Sturt University, Albury, NSW. He has undertaken extensive research exploring the social implications and opportunities of changes in the agricultural and forestry sectors. He provided advice at key points during the market research process and in writing the Final Report. Website builder: Peter Leman, principal of Leman and Russell Pty Ltd based in Melbourne, provides the full suite of web services, including website design and construction, email newsletters, ecommerce, and search engine optimisation. Clients include Circus Oz, Chamber Made Opera, Arts Project Australia and Carlton Football Club. Website graphic designer: Max Marks, director, MapCreative, has a Bachelor of Graphic Design, Swinburne University. Clients include AXA, Parks Victoria and Aboriginal Affairs Victoria. Graphic designer for SMARTimbers material.

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Acknowledgements Great patience and persistence were shown by Nolline Williams in completing the phone survey and face to face interviews that form the foundation of this project’s market research. Dr Digby Race played a crucial role in questionnaire design and sample stratification, as well as through his comments on the draft final report. Website builder Peter Leman proved a whizz in the design of interactive features, and a rock when it came to the (endless) tweaking of the design. All bar and pie charts in the Key Findings chapter were generated by Millward Brown Australia. The structure and content of the analysis in the final report has been vastly improved by the thorough editing and constructive criticisms of JVAP Research Manager Dr Rosemary Lott.

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Contents Foreword............................................................................................................................................... iii Research team....................................................................................................................................... iv Acknowledgements................................................................................................................................ v Executive Summary ........................................................................................................................... viii Introduction ........................................................................................................................................... 1

Relevance of single desk marketing for farm forestry groups..............................................................1 Website as a marketing tool for farm forestry trading groups..........................................................2

Benefits of marketing and processing high value products..................................................................2 Economic benefits ............................................................................................................................2 Environmental benefits.....................................................................................................................3 Social benefits ..................................................................................................................................3

SMARTimbers – a farm forestry cooperative ......................................................................................3 Objectives............................................................................................................................................... 4 Methods used ......................................................................................................................................... 5

Phone surveys.......................................................................................................................................5 Face to face surveys .............................................................................................................................6 Focus workshop....................................................................................................................................7 Website establishment..........................................................................................................................8

Monitoring of site visitation.............................................................................................................9 Key findings ......................................................................................................................................... 10

Phone surveys.....................................................................................................................................10 Business profiles ............................................................................................................................10 Types of timber products, their sources and lead time to specifying .............................................11 What respondents thought of the marketing kit and sugar gum samples .......................................12 Relationship with supplier..............................................................................................................14 What clients want ...........................................................................................................................14 Website services of most interest ...................................................................................................17

Face to face interviews .......................................................................................................................17 Business profiles ............................................................................................................................17 Preferred marketing kit format .......................................................................................................17 Example of most effective marketing kit .......................................................................................17 What architects think their clients want in timber..........................................................................21 Perceptions of SMARTimbers .......................................................................................................22

Focus workshop..................................................................................................................................24 Session 1: What do you think of SMARTimbers products and dimensions? ................................24 Session 2: How do we communicate SMARTimbers’ message to architects? ..............................25 Session 3: How do we convert the rhetoric (i.e. via both architects and clients) about the Specification of sustainable products into practice? ......................................................................25

Website visitation...............................................................................................................................27 Subscriber questionnaire breakdown..............................................................................................27

Discussion............................................................................................................................................. 29 Identifying the target market and buyer behaviour ............................................................................29

Small-medium scale architectural firms offer best fit ....................................................................29 Small-medium scale firms most likely to retain control of specifying...........................................30 Clients of firms mostly driven by price..........................................................................................30 Attitudes of builders .......................................................................................................................31 Local government and government agencies .................................................................................31

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Identifying products for your market .................................................................................................31 Matching products to market demands...........................................................................................31 The niche should not be too small..................................................................................................32 Price setting ....................................................................................................................................32

Branding the business.........................................................................................................................33 Have a clear message that differentiates you from competitors .....................................................33 How important is being sustainable?..............................................................................................34

Promoting the business.......................................................................................................................35 Direct marketing as the preferred avenue of learning ....................................................................35 Website as another avenue of learning...........................................................................................35 Use of marketing kit for gaining market entry ...............................................................................37

Addressing risk and perceived limitations .........................................................................................38 Doubts about the quality of specialty timber..................................................................................38 Proving consistency of supply........................................................................................................38 Efficient distribution ......................................................................................................................38

Implications for farm forestry groups and marketing..................................................................... 41 Target small-medium scale architectural firms for niche building products ..................................41 Tailor product ranges to suit local needs........................................................................................41 Find a niche large enough to provide a decent rate of return .........................................................41 While the farm forestry story is very appealing, it cannot be taken for granted ............................41 Proof of traceability rather than formal certification......................................................................41 Implement and build personal one-to-one to build strategic relationships.....................................42 Heavy reliance on the internet by small-medium scale architectural firms when seeking product information .....................................................................................................................................42 Producing a professionally produced marketing kit provides an ongoing presence for specifiers and their clients ..............................................................................................................................42 A range of educational and consumer awareness programs are required to aid market penetration........................................................................................................................................................42

Recommendations ............................................................................................................................... 43 Bibliography ........................................................................................................................................ 45 Appendices ........................................................................................................................................... 47

Appendix 1: SMARTimbers Market Surveys – Research outputs.....................................................47 Appendix 2: Market Survey Questionnaire Phone version, 18 January 2006....................................48 Appendix 3: Market Survey Questionnaire Face-Face version, 31 July 2006 ...................................51 Appendix 4: Web Subscriber Questionnaire, SMARTimbers Co-operative Ltd, January 2006........54

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Executive Summary What this report is about This report outlines work conducted via SMARTimbers Cooperative Ltd in Victoria to test and adapt a single desk marketing structure suitable for use by farm forestry cooperatives. The project surveyed architects’ use of native Australian timbers, in particular sugar gum, and their preferred means of accessing and receiving information. The report also considers architects’ level of control of timber choice and purchase by builders, and suggests ways of promoting a farm forestry cooperative and its products, including via web-based promotion. Intended audience The report is relevant to farm forestry cooperatives, farm forestry extension and growers, forestry policy and research funders. Background Typically, farm foresters individually sell logs at harvest for commodity products and receive a low return stumpage from local sawmills. This has patently failed to deliver real economic returns, and threatens to undermine the spread of farm forestry nationally. Through market research, this project proposed to test and adapt an innovative group-marketing model developed by the SMARTimbers Cooperative Ltd. Aim The project aimed to test the development and management of value-added, single desk marketing by a tree-growing cooperative, as a method suitable for other group structures (e.g. companies) throughout Australia. It also used market research surveys and website establishment to inform marketing strategies by farm forestry groups. Methods Quantitative and qualitative market surveys were undertaken from a sample of over 400 architectural firms sent a SMARTimbers marketing kit. 101 architects were surveyed by phone. These were followed by in-depth face-to-face interviews with 56 architects; and a focus workshop with eight key client firms of SMARTimbers. A component of the market research involved creating, for the first time, a professionally produced website for a farm forestry trader (i.e. SMARTimbers). This website was tested over a year for its effectiveness in extending farm forestry’s marketing reach. Results Results of the research were: • Small-medium scale architectural firms provide a good fit for marketing approaches from farm

forestry groups. These firms have a high degree of interest and empathy in sourcing traceable farm forest products and unique specialty timbers. This perception cannot, however, be taken for granted. Farm forestry groups need to tell their story early, simply and clearly, tailoring their product range to suit their selected target audience;

• A professionally produced website extends market reach, with two-thirds of architects surveyed citing the internet as a primary source for product information;

• Firms are looking for product samples, technical information and case studies to back up a farm forestry group’s claimed product applications for its specialty timbers. Providing these as part of a ring binder marketing kit provides a highly valued, readily available reference;

• Architects claimed that their clients were more interested in ‘the look’ of a product than its sustainability;

• Sustainability on its own was rarely the main driver. Purchase decisions result from a mix of factors including price, appearance and technical performance. Builders, in particular, act as a barrier to specifying sustainable products, as price acts as the major criterion on which they base their purchasing decisions. Local government and government agencies purported a preference for

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Australian sustainable timber products, but this was disconnected from their actual purchasing actions;

• The widespread ignorance of Australian timbers and their sustainable nature ought to be of concern to policy makers in the timber industry and government;

• Major impediments for farm forestry groups are the desires of firms to deal with long established suppliers with whom they have a personal relationship, allied with concerns about consistency of product supply.

Recommendations For farm forestry groups: • Where harvest is less than five years away, survey a sample of small-medium scale architectural

firms in the region to identify market gaps; • Hold focus workshops with firms that rate most favourably to build personal relationships; For the forestry industry sector and R&D funders: • Design educational material suitable for architectural and building courses, as well as launching a

mass marketing campaign to highlight the sustainable benefits of specifying Australian timber products;

• Increase the availability of technical information about specialty timbers through a manual aimed at builders, as well as via the internet.

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Introduction There are substantial areas of forest under private ownership that are managed by small scale landholders. These farm plantations and private native forests constitute the farm forestry resource. In Victoria, the Private Forestry Council estimated that 7% of plantations (i.e. 21,000ha) are managed by small scale farm foresters. Nationally, the National Forestry Inventory (2003) estimated that Australia has 39 million hectares of private native forest, equivalent to 24% of total forest area. In commercial timber production zones covered by Regional Forest Agreements, private native forest represents 28% of the total forest area compared with 34% for public forests. Private native forests supply a significant proportion of hardwood log harvest in some regions of Australia. In a paper to the Ballarat Australian Forest Growers Conference in May 2004, Alf Said, Director of the NSW Office of Private Forestry concluded that while private native forest managers “are not co-operators by nature…there are, however, likely to be efficiency and marketing benefits to growers and processing industry alike in managing resources collectively (Said 2004). Such a collective could also form the basis of a certification group for growers wishing to take advantage of the potential benefits of forest certification.” In general, an opportunity exists for better co-ordination of farm forest owned resources to produce sustainable forest products. Aggregation using an integrated supply chain and single desk marketing has, in other primary industries, delivered economies of scale, consistency of supply and better targeted marketing. The value added, single desk marketing model based on regional specialty timbers takes advantage of farm forestry’s natural attributes. In this project, quantitative and qualitative market surveys of SMARTimbers’ targeted client base aim to provide feedback on whether its single desk marketing model has legs in the marketplace. The market research was designed to enable improvement and adaptation of this model. The research identifies those marketing features worth replicating by other farm forestry groups when setting up their trading structures.

The report on website construction and the method for evaluating visitation aims to provide invaluable information to other farm forestry trading groups in what does and does not work when implementing this internet-based marketing tool. It aims to add to the body of research on the efficacy of this new technology in extending farm forestry’s marketing reach. The results of the market research surveys and website establishment aim to benefit the development and management of value added, single desk marketing by tree-growing co-operatives or other group structures (e.g. companies) throughout Australia. It is contended that this could provide an alternative marketing model for farm foresters around Australia more suited to the nature of their tree growing – and with the potential to deliver higher returns to farmers and growers than existing marketing models. Relevance of single desk marketing for farm forestry groups Farm forestry is personalised and diverse in nature. Farm foresters often prefer to grow mixed, indigenous species (i.e. specialty timbers from their region). For most farm foresters, tree growing is small in scale (often less than 10 hectares), which requires aggregation if they are to find a market for their products. The SMARTimbers marketing model aims to deliver higher returns to farm foresters for specialty timbers common to their region. The model draws on the strengths and points of difference of farm forestry in comparison to the high volume industry approach based around a few commercial species. It is potentially replicable wherever there are groups of farm foresters within trading distance of a capital city or major port.

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The major components of the model are: • The establishment by a farm forestry group of an integrated supply chain from harvesting to

product processing, combined with • a single desk marketing structure that focuses primarily on producing sustainably sourced, higher

value products for an identified market segment. Website as a marketing tool for farm forestry trading groups Over a number of years the Private Forestry Council of Victoria’s (PFC) Product and Market Development Committee looked at establishing websites as communication vehicles for private forestry groups. In March 2004, a PFC report on web-based marketing noted that many timber trading websites existed overseas but: “Apart from the development of home pages by companies, cooperatives and associations, there is little in the way of web-based marketing specifically directed at Australian timber and forestry products.” (see Bibliography at the back of this report for some timber trading websites.) While the PFC did not support development of an interactive trading website for small-scale private foresters, industry groups acknowledged that a freely and easily accessible, well-designed information-based website could significantly extend the market range of farm foresters. Consequently, it was proposed to establish a SMARTimbers website to improve information delivery about the technical specifications of the specialty timbers on offer, and provide background on the landholder group and its principles, the product range, comparative pricing and traceability. In this project, techniques were implemented to track visitors to the website, so that at the end of a year’s operation the report could provide meaningful analysis of not only the numbers who visited the website, but also their professions, degree of interest in traceability, price elasticity and the type of products they want. Benefits of marketing and processing high value products The specialty timbers often preferred by farm foresters, and small scale of farm forests, means that there are only low volumes for harvest. Because of the small scale, it is difficult for farm foresters to compete with industry groups for commodity products. Farmwood Tasmania and the fate of many of the nation’s 14 treegrowing co-operatives has demonstrated that farm foresters cannot compete with large industry players in delivering high volume commodity products (Wettenhall and Henderson 2003, Clinnick 2004). Also, the traditional market model of farm foresters individually or collectively selling logs to local sawmills for a low return stumpage has also proven inadequate: except in some resource-constrained regions (see URS Forestry 2008), returns are pitiful when time, effort, labour and capital are taken into account over the long rotations required for growing sawlogs. This project recommends that farm foresters aggregate their resource and convert the relatively low volume to high value products which have a market advantage and achieve a greater return. Economically, the goal is to establish farm foresters as price-setters, rather than price-takers. Harvesting of low volumes for high value products also avoids the need for clearfall of farm forests at unsustainable rates in order to make an economic return. Value-adding along the supply chain involves forging alliances with local firms, boosting job creation and economic activity at the regional level. Economic benefits SMARTimbers has already substantially increased stumpage returns to landholders, in particular for large, straight sugar gum logs which offer the best rate of recovery for processing into high value building or furniture products. The cooperative purchases large diameter logs (40-60cm DOB) from landholder members or from firewood cutters at $75-90/m3 at harvest. Five years ago, the rate of return for firewood to the landholder was $5-20/m3.

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However cooperatives need to be patient and committed while a market and new products are developed. It takes time to refine an approach and achieve goals. SMARTimbers Cooperative members have pooled funds in two joint ventures, the first of which delivered a 3% return. Begun in 2006 the second joint venture raised $105,000 from 13 of SMARTimbers 42 members. The logs purchased were rough sawn at a small scale sawmill, solar and air dried for six months, then processed locally by a commercial joinery firm. Sales, however, only grossed $130,000 in the 2005/06 financial year. This is well short of the SMARTimbers Business Plan, which aims for an annual gross of $1 million. This target turnover would fund a SMARTimbers office with a full-time staff of a field officer and a marketing officer. Environmental benefits Value-adding optimises utilisation and conservation of limited resources. Increasing returns to landholders encourages and provides the funding for implementing silvicultural management. Farm foresters can offer traceability back to the source. As its full name implies, Sustainably Managed Australian Regional Timbers is training landholder members to properly manage their farm timbers. The cooperative is seeking Australian Forestry Standard group certification for its members. Offering traceability is expected to act as a competitive advantage for the cooperative’s target client base. Since 2002, SMARTimbers’ activities have helped stimulate over 1,500ha of new plantings of sugar gum in the Western District for the first time in 60 years. Social benefits SMARTimbers low volume/high value approach requires building alliances along the supply chain with harvesting and haulage contractors, small scale sawmills, kiln drying facilities and local joiners. This involves job creation and offers opportunities for extensive community participation and education in relation to private forestry. SMARTimbers marketing has also boosted innovation within the local timber industry; e.g. SMARTimbers identified a need by architects for shiplap panelling. In conjunction with a local joiner, the cooperative developed tongue and groove exterior panelling for sugar gum. SMARTimbers – a farm forestry cooperative The SMARTimbers model arose out of market research commissioned by the Private Forestry Development Committee for central Victoria, Central Victorian Farm Plantations Inc (CVFP), aimed at developing a viable trading structure for farm foresters in the region. The market research by consultant David Higginbottom identified a target market audience of architects and/or building firms working at the top end of the market in Melbourne, who exhibited interest in obtaining high quality, aesthetically different and sustainably-sourced products for their clients. Higginbottom’s research also identified furniture manufacturers as a target audience. The resultant group model sought to aggregate mature specialty timbers within central Victoria, then market a small range of high value products that exhibited a ‘unique selling point’ into the top end of the dominant market place (i.e. state capital city), offering personalised service and traceability back to the farm. Mature sugar gum (Eucalyptus cladocalyx) is common in farm plantations within SMARTimbers’ catchment. There is over 3,000ha of sugar gum in farm plantations throughout the Western District, which has been cut for firewood at the rate of 40,000m3/yr since the 1920s. One of the four specialty timbers identified in the CVFP market research, sugar gum seemed to offer the requisite ‘unique selling points’. A dense, hard timber with a Class 1 natural durability rating, its natural competitive

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advantage seemed logically to lie in processing and marketing for exterior purposes, such as decking and exterior shiplap cladding. SMARTimbers was formed as a trading cooperative in 2002 and landholder members have primarily invested in purchasing and processing sugar gum into decking and cladding. In 2004, SMARTimbers employed an experienced Marketing Officer, Nolline Williams, to initiate face to face contact with architect firms in Melbourne, branding and promoting sugar gum. Operating from Ballarat, marketing is also targeted at architects and builders in the regional cities of Ballarat, Geelong and Bendigo. A trial was undertaken in producing rotary peeled, sugar gum veneer (0.6mm). In 2006, a cooperative member invested in producing kiln dried, secret nail sugar gum flooring. Attempts to promote Monterey cypress (Cupressus macrocarpa), another common farm plantation timber in central Victoria, have met with little success – despite being an alternative softwood exterior product widely used for framing, decking and posts in New Zealand. As a result, SMARTimbers’ marketing to architects and builders has single-mindedly focused on promoting sugar gum.

Objectives This project aims to: • Evaluate single desk marketing by a farm forestry group of high value products aimed at a target

audience of architects. • Test whether a well-designed website could extend the market penetration of a farm forestry

group.

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Methods used The project used quantitative and qualitative market surveys of architects. The sample was determined by selection from 400 architects, landscape designers and builders who had been sent a SMARTimbers marketing kit by Marketing Officer Nolline Williams over a period of 18 months from July 2004 to December 2005. Nolline Williams captured their contact details on a spreadsheet. Of the above, all clients who had actually purchased from SMARTimbers (25) and those with whom the Marketing Officer had had personal dealings (75) were set aside for the qualitative face to face interviews and a focus workshop. It was intended to seek open-ended qualitative responses from this sample of the above population. The remaining 300 were stratified by firm size (large/small), location (city/regional), ‘greenness’, and firm type to ensure a balance in the proposed 150 phone interviews. Stratification for the surveys was discussed with Charles Sturt University researcher Dr Digby Race. Market surveys aimed to ascertain: • Their degree of satisfaction in the quality of samples/products supplied. What are the products most

in demand? • Their level of awareness of the co-operative and its products. How can the marketing kit be

improved? • Their degree of comfort in dealing with a landholder-owned marketing group • Is the premium price of specialty timber a major barrier to purchase by their clients? • Does the uniqueness of specialty timber confer an added status and attractiveness, justifying

payment of a premium by their clients? • Is traceability to a sustainable source an advantage compared with other products, timber or

otherwise? Will their clients pay a premium for it? • What level of service do they expect? Is personalised service an advantage? What level of technical

information is expected? • What is their preferred supply turnaround? Does it vary from product to product? Phone surveys Over a year, the SMARTimbers Marketing Officer undertook 101 phone interviews designed to be of 15 minutes duration.

The telephone survey questionnaire was prepared by Gib Wettenhall, Nolline Williams and Dr Digby Race, with the draft forwarded to Millward Brown Australia for checking that no incompatibility problems would exist to impede data analysis.

The phone survey had 16 questions. A copy of ‘Market Survey Questionnaire – Phone Version’ is in Appendix 2. The survey’s sections consisted of: • Q1-8 defines the interviewee’s firm and timber products they use; • Q9-11 asks for comments and rankings on SMARTimbers marketing kit; • Q12 asks for ranking of most valued service attributes that expect from a timber supplier; • Q13 looks at the value placed on specialised attributes of a farm forestry supplier as compared to a traditional timber supplier; • Q14 asks if intend to do business with SMARTimbers in future; and • Q15-16 are related to ranking of website services.

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From the completed questionnaires, Millward Brown Australia produced a report Architectural Resources Market Phone Survey, July 2006. The key findings of the phone surveys are given in the next chapter. Initially, it was intended to complete 150 phone surveys from the 300 questionnaires mailed out. However, 69 were no longer at that address, leaving a pool of 239 architecture firms that had received a SMARTimbers marketing kit, from which the 101 surveys were completed. Although the interview was designed to be 15 minutes, the actual project survey time was much longer. This is because the marketing officer had to call an average of 4-5 times before gaining an interview. Although she met little outright hostility when she called to arrange an interview, about 80 per cent put off the interview to another time. She gave up after contacting 6-7 times without gaining a response. Face to face surveys Ninety clients with whom SMARTimbers has had dealings between 2004 and 2006 were sub-sampled for 30 minute face to face interviews with the Marketing Officer. A target of 50 was set for completed interviews. By completion in February 2007, 56 interviews had been completed. Digby Race, Nolline Williams and Gib Wettenhall met in mid-July 2006 to design the face to face survey questionnaire. A copy of this second survey is provided in Appendix 3. The face to face survey format allowed more probing questions and following up on areas of interest from the phone survey. Issues that were pursued further with architects as a result of the phone survey were: • What was their preferred format for the marketing kit (e.g. ring binder, portfolio folder) and could they show us an example of their favourite kit? – see Q5; • As this group would have used SMARTimbers products, we asked them what they thought of sugar gum – see Q6. • In the phone survey, the architects had said they mainly used the web to find new products. But given they also wanted guaranteed, high quality sustainable products, this time we wanted them to be more specific on the process followed to achieve these ends – see Q7-8; • What did SMARTimbers have to do to prove traceability? – see Q9-10; • Given a high percentage left specification of timber to their builder, how many had close relationships with a small core of preferred builders or, alternatively, nominated preferred suppliers for their builders to follow up? – see Q11-13; • Similar to web subscriber questionnaire findings, the phone survey found clients wanted to use different timbers. We wanted to know exactly why – see Q14; • Of the small proportion of clients who are not fussy about price, what are their characteristics (so as to aid in targeting)? – see Q15; • What they thought about SMARTimbers – see Q11-17; • Finally, how they suggested SMARTimbers might best gain profile in the marketplace – see Q18 Gib Wettenhall consulted with social research firm Millward Brown in the design of the questionnaire. Interviewees were asked to rank priorities. At the conclusion of interviews, Nolline Williams and Gib Wettenhall provided a codeframe for 9 of the 18 questions that were open-ended. They form the last section of Architectural Resources Market F2F Survey, Millward Brown, March 2007. Cross-tabulated graphic reports are gathered together in this Millward Brown report. The key findings of the face to face interviews are given in the next chapter.

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SMARTimbers Marketing Officer Nolline Williams (on left) interviewing architects in the face to face interviews. The ring binder marketing kit is in the centre background. Focus workshop 25 of the architect firms with whom SMARTimbers has had most dealings were invited to attend the focus workshop. These were personally contacted by Nolline Williams and Gib Wettenhall to attend a morning workshop on Friday 13 October 2006 in Millward Brown Australia’s board room in St Kilda, Melbourne. It was thought this well serviced, central Melbourne location provided greatest ease of access. As a further inducement, SMARTimbers supplied a sushi lunch. The agenda was designed by Gib Wettenhall and Nolline Williams, with the draft going to Digby Racefor comment. Gib Wettenhall consulted with Millward Brown in workshop design. Millward Brown provided a notetaker and transcript of the workshop. The key findings of the focus workshop are given in the next chapter. Eight clients and the SMARTimbers chairman Andrew Lang attended the half day focus workshop, which began with a Powerpoint presentation about SMARTimbers. The first session looked at SMARTimbers’ existing products. Those present were divided into small groups to come up with a product they would most like SMARTimbers to include in its range. The second session aimed to analyse how we communicate SMARTimbers’ message to architects. Gib Wettenhall also gave a Powerpoint presentation of the major findings from the phone survey as to how architects go about specifying their products. The third session then focused on examining how we convert the rhetoric about sustainability into practice in the specification of products. This was done by presenting a series of scenarios and asking for the workshop participants’ reactions.

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Website establishment The existing home page of www.smartimbers.com.au was revamped as a first priority in October 2005.

Peter Leman in consultation with graphic designer Max Marks of MapCreative and Gib Wettenhall then built a website for SMARTimbers that was attractive and accessible, with an easily navigated menu system.

Seven menu buttons were agreed in consultation with the SMARTimbers Board. The design was in uniformity with other marketing products already produced by MapCreative for SMARTimbers. The revamped home page is pictured in Figure 1. Menu buttons are: • Quotes & Orders (obtaining quote and marketing kit); • Timbers & Specs (technical details); • The Co-op (concept, charter, benefits, membership); • Case Studies (photo gallery of completed jobs); • News & Services (includes reports); • Co-op Members ( password protected – Board Minutes, Sales Reports, Rules, chairman reports, pricing comparisons); • Web Subscribers ( password protected – pricing, quoting calculator and product updates).

Figure 1: Home page of the redesigned SMARTimbers website, launched February 2006.

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Monitoring of site visitation A questionnaire was designed to go on the website to determine the type of website visitors and their specific interest in specialty timbers. Gib Wettenhall consulted with Paul Turnbull from the Victorian DPI’s Product and Market Development Committee in its design. Filling out this questionnaire was a pre-condition of gaining access to information contained within the website’s Subscriber menu button (product pricing list and a quoting calculator). Paul Turnbull also suggested adding a question on ‘Tendering for discounted products when available.’ The web Subscriber questionnaire contained six questions to determine visitor priorities (see Appendix 4). Its design was similar to a voting form so that visitors had to rank from 1 though to 6. Once filled in, visitors gained their own unique password to Subscriber services. Figure 2 shows the Subscriber website page. The other interactive feature on the website was the quoting calculator within the Subscriber menu button. Linked to product pricing, all the visitor had to do was fill in the quantity of product(s) required and the calculator automatically costs their order. A comments field allowed the visitor to type in any special requirements as to dimensions or freighting, for instance. Then, if she wanted, the visitor could submit via email to the Marketing Officer for a firm quote. This step was made easily accessible by a hot button at the foot of the calculator, which said ‘Submit’; once clicked the form would go automatically via email to Nolline Williams. The program also automatically generated a ‘thank you’ email from Nolline Williams, telling the visitor that she would respond to their order request as soon as possible. This sophisticated feature both captured visitor contact details, as well as streamlining the ordering process. Gib Wettenhall provided material to Peter Leman to build the website offline throughout January and February 2006.

Figure 2: Questionnaire on Subscriber menu of SMARTimbers website, which on completion gave visitors access to a product price list and a pricing calculator.

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Key findings Phone surveys The phone survey confirmed the ineffectiveness of ‘cold calling.’ No-one said to the Marketing Officer on the first call, “Let’s do it now.” All wanted to see the questionnaire before interview. Most people said they preferred to fill it in themselves in their own time. Interviewees were relieved when they found she was offering them flexibility as to timing, and choice as to methodology of filling in survey. This methodology suited SMARTimbers as we wanted to get to the timber specifier within a firm and thereby elicit a considered response. The survey generally took exactly 15 minutes to do. The Marketing Officer asserted that this was also the professed outer limit of most interviewees’ patience. All respondents (n=100) completed the following sub-sections unless otherwise stated. Business profiles Size of the firm Small (less than 5) to medium scale (5-20) architects were the most willing to participate in the survey, and proved the easiest in gaining access to the firm’s timber specifier (88% of sample in total). Primary location of business Over 70% of those surveyed were in Melbourne metro and inner suburbs. Small firms were, however, less likely to be located in Melbourne’s central area. Businesses with less than five employees were significantly less likely to be located in the Melbourne metro than the total (21% compared to 36%). Type of work

Figure 3: Firm’s type of work

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A good range of commercial and domestic architects was represented in the survey (Figure 3). Businesses with less than 5 employees were significantly less likely to be involved in commercial work (16%) than the total (31%). Age of business For the firms surveyed, the average duration in business was 16.7 years. Types of timber products, their sources and lead time to specifying Decking, kiln dried hardwood flooring and exterior cladding were the key timber products used by firms (in that order) (Figure 4). Domestic architects were more likely to use hardwood flooring (65%) than the total (45%).

Figure 4: Ranking of timber products used by the firms surveyed. In obtaining information about timber products, firms cited the web as the major source (67%), then visits from their suppliers and trade libraries were their next most-used source. Trade magazines and word of mouth formed the third level of sourcing (see Figure 5). Timber yards and timber merchant associations were turned to by less than 5% of firms. A high percentage of architects (28%) took a hands-off approach and left it to the builder to specify timber. Otherwise, the average time from specifying to requiring delivery was about 1 month (see Figure 6).

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Figure 5: Source of a firm’s information when obtaining timber products.

Figure 6: Who actually does the specifying and the lead time to supply. What respondents thought of the marketing kit and sugar gum samples The sustainability claims and the provision of product samples were regarded as the most attractive features of the marketing kit and were ranked highest. Secondary ranking was given to the Class 1 durability of sugar gum, and the provision of a product pricing list, case studies with photographs of

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products in use and the technical specifications. Figure 7 gives a breakdown of the top three rankings. It should be noted that 52% of those surveyed said they had not seen the marketing kit; 19% responded don’t know; and 3% made no response. Nearly half the survey respondents (48%) did not answer the question on what they found most attractive about sugar gum. Those that did respond gave top ranking to sugar gum’s durable nature (31%), followed closely by sugar gum’s light colour/appearance (28%). Sustainability was only ranked third at 11%, though it ranks higher if combined with preferences for local and plantation timbers (total of 23%). These and other criteria are shown in Figure 8. The survey respondents suggested that SMARTimbers should provide more samples in future, in particular larger in size, plus more updates and technical information.

Figure 7: The most appealing aspects of SMARTimbers marketing kit

Figure 8: Sugar gum characteristics that most appeal

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Relationship with supplier The architects surveyed in the phone surveys want the full range of services from a high quality product to prompt delivery, though low price is cited as of least importance to architects themselves (Figure 9). On a 1-5 scale, the top rankings were: a) guaranteed high quality product (85%); b) access to appropriate technical information (85%); c) consistency of supply (77%); d) sustainably sourced (73%); e) long lasting relationship (69%).

Figure 9: Qualities most valued in relationship with a supplier (mean values are shown) What clients want While architects claim that they are interested in sustainability, when it was put to them, most thought that well over half their clients were barely interested. Figure 10 demonstrates that 58% of architects’ clients are not interested in sustainable sourcing compared with 22% interested in tracing their timber back to a particular place.

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Figure 10: Client interest in sustainable sourcing In terms of what architects thought would be their clients’ interest in ‘different and unique’ specialty timbers, the proportions cited were: • 44% of clients not interested; • 30 % thought to be indifferent; • 24% of clients were likely to express an interest. There was an equal division between clients who were thought to prefer using local timber to overseas timber (Figure 11). But on the next question, when it is put slightly differently: “What proportion of your clients are interested in using native Australian rather than exotic species?” – over 50% of clients were cited as being interested in using native rather than exotic timber species.

Figure 11: Client interest in local versus overseas timber

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When it came to the importance of product pricing to product selection, here’s the rub: while architects say they don’t care about price, the great majority of their clients do (see Figure 12). What, we wondered, would be the characteristics of those clients who were purportedly not influenced by price in their decision-making? (This question was addressed in the face to face interviews). Architects were, however, asked in the phone surveys what proportion of their clients would be prepared to pay a 10% premium for sustainably sourced timber (Figure 13). From their responses, it would seem a large proportion of their clients (43%) are not interested in paying a premium; 25% are undecided; and 24% would be prepared to pay a premium.

Figure 12: Proportion of clients who would select their timber products based primarily on price.

Figure 13: Client interest in paying a 10% premium for sustainably sourced timber.

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Website services of most interest Technical information (49%) and product information updates (39%) were ranked as of the greatest interest to the small number (n=33) who responded to this question. Both this and the following question were only asked of the 42% of the survey respondents who said they “might do business with SMARTimbers in the future.” 46% of architects would only answer “Maybe.” The second question answered by 42% of the survey respondents was: “Would you consider registering for free on our website to access product information updates, technical information, showcasing of products in situ, pricing and a quoting calculator, or gaining the ability to tender for discounted products?” Of those, 72% said they would consider free website registration. Face to face interviews This survey was drawn from existing SMARTimbers clients, as already discussed on page 14. All respondents (n=56) completed the following sub-sections unless otherwise stated. Business profiles Size of the firm Small architect firms (less than 5) made up 53% of the interviews, with 34% being medium scale (5-20) and 13% large scale. Primary location of business 45% were from regional towns and another 41% from inner Melbourne. Type of work Mainly domestic architects (64%) were represented in this survey. There was a range of architects who did commercial work (25%), education supply (20%) and government(16%). Multiple responses were accepted. Length of business The average age was13.8 years for the firms surveyed, with almost one-third in the 6-10 yrs cohort. Role in the firm The SMARTimbers Marketing Officer was seeking to talk with a firm’s timber specifier. Although 60% of those interviewed were architects, it was not always the person who had previously dealt with SMARTimbers. Preferred marketing kit format 90% commented that a ring binder that stands up on a shelf is the most useful, as it is easy to locate and matches the preferred method of storing information. Example of most effective marketing kit Almost half (47%) regarded the SMARTimbers Arch Lever ring binder marketing kit as state of the art, with comments that it was informative, easy to use and appealing. Extras suggested for inclusion were:

• More case study pictures of SMARTimbers products in use. Clients like to see glossy images (“colour and movement” was one comment);

• Provide a form in the kits so architects can fill it in and fax, requesting more samples.

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Figure 14: Use and limitations of sugar gum Less than half of the sample were clients who have used sugar gum: only 25 architects have used sugar gum to date, with a high percentage of repeat orders, according to Nolline Williams. From the small sample of users, major limitations are price, SMARTimbers’ limited range of products and sugar gum’s appearance (Figure 14). 11% of the sample were uneasy about shrinkage, movement and the colour change of natural materials, compared with the behaviorial predictability of man made materials. None of these top four concerns are very elastic in a business sense. Methods for seeking new timber products The phone survey response confirms the importance of the internet as a source of information. Larger firms rely on visiting representatives, pooled experience and project construction managers. The internet is used particularly for updates. Free building publications and architectural magazines are another primary source. When combined, conferring with their builders and sharing information between architects (word of mouth), provides a route for almost a quarter of architects when sourcing products.

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Figure 15: Researching the sustainability of products Most firms said they undertake thorough research of the sustainability of products they purchase (mean of 3.77 out of 5; refer Figure 15). Most then said, however, that SMARTimbers did not need to formally certify its timber products as sustainable. All that we need to do is to tell the story, showing the links in the value chain from farm to finished product (61%) – see Figure 16. A conversation or direct claim by SMARTimbers would suffice in demonstrating traceability for 18% of respondents. In a separate, follow-up question, 84% of respondents agreed with the statement: “If SMARTimbers could trace the source of all its timber back to specific farm plantations that are sustainable managed would this be as satisfactory as formal certification with a third party organisation?” While 20% require certification, it is usually only for commercial construction, rarely for domestic jobs where clients are simply not interested.

Figure 16: How do architects expect SMARTimbers to prove its claims that it is delivering sustainable products?

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Figure 17: Percentage use of preferred builders by architects. The majority of architects surveyed (79%) stick with a handful of preferred builders (3 or 4). Another 16% claim to use preferred builders most of the time (Figure 17). Only 5% say they would tender most of the time. Note that most of the architect firms in the face to face survey were small-medium scale. In the Focus Workshop, it was pointed out that large scale architectural firms tend not to use preferred builders: they go out to tender or use a construction manager. The implications of this are discussed in the Focus workshop sub-section as well as in the discussion. We wanted to know to what extent do architects nominate preferred suppliers when briefing builders. 79% responded they would nominate preferred suppliers, while 16% say they would do this most of the time. We followed this up with a question asking if the architect doesn’t specify, how do they know their building is choosing either sustainable orf quality products, and not simply purchasing the cheapest products available. Figure 18 below shows their responses.

Figure 18: If the architect doesn’t specify, how do they know their builder will use sustainable/quality products?

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Basically, although architects would characterise themselves as generally ‘green’, sustainability is regarded as only one aspect of the decision-making process. The final decision boils down to a compromise between the cost and other factors according to over a third of those surveyed. 29% say they trust the advice of their builders. 20% of architects take a hard line, insisting that their builders use the best quality and most sustainable products available. What architects think their clients want in timber The number one concern of 39% of clients is ‘the look’ of the timber product; i.e. colour, appearance, aesthetics (Figure 19). Next, the client seeks and follows the advice of their architect (i.e. 21% are ‘architecturally-driven’). Sustainability is well down the list as a client concern (9%).

Figure 19: Main reason for clients wanting to use different timbers According to 70% of the architects surveyed, over 90% of their clients are reportedly concerned about price. Of the other 30% of architects surveyed, nearly half said 76-90% of their clients were price sensitive when selecting timber products. A total of 13% of the architects sampled thought about half their clients were not fussed about price. Figure 20 sets out the main characteristics of the small proportion of clients least fussy about price as:

– Have an awareness of quality and achieving long term value via the purchase of a high quality product (29%);

– Earn a high income and not bank financed (29%); – Interested in sustainability (18%); – Status/brand driven (16%); – Sense of aesthetics and design oriented (14%); – Those far-sighted enough to be concerned about cyclical maintenance costs; in particular, long

term maintenance is a priority for local government.

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Figure 20: Main characteristics of clients least fussy about price Perceptions of SMARTimbers Nearly 40% did not respond to the question on what were their perceptions of SMARTimber (see Figure 21). While Nolline Williams thought this occurred as a result of their lack of experience in dealing with SMARTimbers, when asked what were SMARTimbers’ limitations only 5% failed to respond (see Figure 22). On the positive side (Figure 21), SMARTimbers is seen as:

– Small scale and local, as well as cooperative and community-based (37%); – Environmentally oriented (20%); – Catering to niche market (16%); – Personalised and conscientious (14%); – Proactive through its direct marketing.

But SMARTimbers gains little credit for either value adding, innovation or providing architects with products that they specifically want. On the negative side (Figure 22), the major concern relates to consistency of supply (25%). Builders, in particular, fear delays in supply, particularly for larger orders. There is an allied concern about the availability of sugar gum in the long term. The second major concern (21%) relates to SMARTimbers’ lack of a track record. The availability of cheaper options comes in third at 18%. Lack of outlets where SMARTimbers’ products are readily available was of concern to 16%. Combined, disapproval of SMARTimbers’ limited species and product range totalled 18%.

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Figure 21: Positive perceptions of SMARTimbers

Figure 22: Negative perceptions of SMARTimbers

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Given that a high percentage of architects prefer to source their products from suppliers they know well, we asked those surveyed for suggestions as to how we might best enter the marketplace – see Figure 23. A large majority (64%) thought SMARTimbers ought to continue regularly visiting architects on a face to face basis. To meet architects en masse, it was suggested that SMARTimbers hold luncheon presentations, perhaps in an architect’s firm. Other suggestions were:

– Build relationships with like-minded product suppliers/outlets and increase distribution (18%); – Affiliate with organisations promoting Ecological Sustainable Development (14%); – Offer a faster, more professional response to queries (14%).

Figure 23: Best ways for SMARTimbers to enter the marketplace Focus workshop Eight core clients of SMARTimbers attended the half day focus workshop. All were from small-medium scale architectural firms. Results of sessions are summarised below. Session 1: What do you think of SMARTimbers products and dimensions? It was generally agreed that SMARTimbers ought to stick to its cladding, flooring and decking range of products. A preference, however, was expressed for adding wider boards (135mm) to SMARTimbers’ product range to fill a niche in the market. A squarer, sharper profile for all three products was suggested as preferred by architects (rather than rounded, pencil edge). The workshop was split into two groups and asked to choose a specific product that they would like to see SMARTimbers include in our range.

GROUP A: Wanted plywood veneer in different thicknesses for flooring and wall panelling purposes, with a 3mm face of sugar gum. As a dense hardwood, sugar gum would have a comparative advantage over more usual softwood veneers that mark easily, e.g. via high heels.

GROUP B: Suggested secret nail flooring; veneer slices in a range of thicknesses to be used as a decorative element; stair treads that are glue-laminated to provide 40mm thickness.

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Session 2: How do we communicate SMARTimbers’ message to architects? Direct face-to-face marketing, going around to architects’ offices, was seen as the best way of communicating. One method favoured was to hold luncheon meetings at a specific architect’s firm to which allied firms and builders were invited. It was thought this could be done with different architects on a regular basis. These comments strongly confirmed the findings of the face to face surveys. Another suggestion was to provide the marketing kit as a master file for students at design and building courses at universities. SMARTimbers could talk directly to students at universities, and visit building courses as well. The website was well-regarded by workshop participants. They suggested sending out a broadcast email to architectural firms promoting the website. The marketing kit was seen as an essential ‘flagship’ in raising SMARTimbers’ profile and awareness of the cooperative’s products. Elements of SMARTimbers’ message were brainstormed and written up on butchers’ paper. Workshop participants were asked to rank which three messages they found the most appealing. Participants commented that breaking down the components of our message clearly communicated what it was SMARTimbers did and would ensure differentiation from its competitors. They suggested putting the message on the SMARTimbers’ website and on pamphlets in the order in which they ranked the different elements. The ranked and simplified message was:

1. Our timbers (e.g. sugar gum) come from local farm plantations. 2. The plantations have been managed sustainably for 130 years. 3. Our timber products are managed and made by a small scale landholder cooperative. 4. Our timbers have value as specialty timbers and tell a unique story. 5. Our main timber, sugar gum, is durable and long lasting, with an unusual honey/tan colour.

Session 3: How do we convert the rhetoric (i.e. via both architects and clients) about the specification of sustainable products into practice? The phone and face to face surveys demonstrate that disconnection exists between what architects believe and what actually happens in practice when it comes to specifying sustainable products. A number of scenarios were posed, seeking workshop participants reactions to the issues raised. SCENARIO 1 – In a large commercial redevelopment, SMARTimbers lost the contract, despite significant input from SMARTimbers and the specification of sugar gum for decking. Comments were made that large firms don’t exercise control over the specification of products: they leave that to project construction managers, who generally take the cheapest route. Workshop participants said that SMARTimbers needed to be tougher in quoting by more clearly branding our sugar gum and asking for a deposit to act as a guarantee. They suggested we develop an information package, which is deemed as SMARTimbers’ ‘intellectual property’, then charge for it. The participants thought this scenario was less likely to occur on a residential contract where the architect has more control. Commercial projects, in comparison, are typically cost-driven, with specification delegated to a project construction manager.

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They concluded that perhaps SMARTimbers ought to consider steering clear of large projects unless the cooperative is specified as the sole tender source, a deposit is paid, or SMARTimbers charges an upfront fee for advice. SCENARIO 2 – Builders obtain quotes from SMARTimber, then an order doesn’t eventuate because they claim the price is too expensive. Nolline Williams claimed this was a common scenario. A number of comments were made that many architects have no control over what the builder does and that builders are commonly driven by price. Many domestic clients don’t want to pay the architectural fee, so to avoid this, they only employ an architect to draft their plan. This means that construction management is left in the hands of the builder, with no input from the architect in product selection. It was concluded that SMARTimbers ought to target architects who use preferred builders. To find such architects, it was suggested SMARTimbers approach the Institute of Architects for statistics on the number of architects who maintain control of a project from start to finish. Another suggestion was to pursue architects with a reputation for quality and who therefore attracted clients of that ilk. SCENARIO 3 – A boutique retail timber supplier with environmental credentials was under consideration as a distributor of SMARTimbers’ products in Melbourne. Feedback from the owners, however, claimed that the wholesale cost of SMARTimbers’ products was a prohibitive factor in displaying them – despite no other sustainable products being available for decking, in particular. How do we overcome this? The owner of the boutique retail outlet sought retail margins in the range of 100%. This would have required further deep discounts on SMARTimbers wholesale price, which offers a 30-40% discount to the recommended retail price. He was not sympathetic when told the discount he wanted would drive the price received for our product below cost. Participants said: “Keep doing what you’re doing. Tell your story.” Personalise your story by, for instance, identifying SMARTimbers with a cuddly animal/bird out the front of a plantation. Simplifying the ordering process could beak down one barrier. SMARTimbers could provide a template in the marketing kit whereby architects could make it easy for their builders by giving them a form with the exact specifications along with contact details as to where to get their timber from; e.g. “Call the Marketing Officer at ……”, but keep it simple, because, as participants said, builders are always keen to “save time.” Participants were asked would they consider signing up as an associate member of SMARTimbers, which would give them preferential treatment and advice about sustainable timber products. There was no interest, with the small architects present saying they couldn’t afford an annual fee of $50. At the conclusion of the workshop, it was emphasised once again that while architects can try to be specific, builders will attempt to outmanoeuvre them where they are not convinced about using a particular product. Consequently, SMARTimbers needs to make it a priority to educate the builders; for instance, there are three main builders on the Victorian coastline to the west of Geelong at the moment – target those companies for a start, participants said.

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Website visitation Unique visits and pages read were recorded by the website server for the eight month period between September 2006 and April 2007. Monthly visits averaged 490 with an average of 1,140 pages/mth being read. March 2007 was the month that recorded the most traffic (669 visits). Search terms most commonly used to find the site were SMARTimbers and sugar gum. A common thread for many other searches was a general technical entry, such as Class 1 durable timbers, F 27 hardwood species, janka (hardness) rating, best glue for veneering, oiling hardwood deck, and ‘blonde’ hardwood timber. Other word entries that led to the SMARTimbers website, included searches for decking, outdoor furniture, tongue and groove cladding, secret nail flooring, and a hardwood timber bench. Mention of some other timber species connected with the SMARTimbers website; e.g. black wattle, blackwood, ironbark and river red gum. Then there were the wildcard entries; e.g. searches for ‘Lucas mill’ directed internet users to the SMARTimbers website on a number of occasions. Subscriber questionnaire breakdown A questionnaire was specifically designed to determine the type of visitors to the website and their specific interest in specialty timbers. There were 98 subscribers who completed the web questionnaire over a 12 month period from March 2006 to the end of February 2007. The majority of subscribers who filled in the web questionnaire were associated with architectural firms (27%). Those associated with the timber industry came next (18%), which presumably includes competitors such as timber millers. Builders and DIY home builders each formed 9% of subscribers. Designers, government and educational institutions each made up 6% of subscribers. Those with environmental interests constituted the final significant category of 4%. 13% of those who filled out the subscriber questionnaire were unidentifiable. Figure 24 shows that the top three rankings for all subscribers were:

– 31% ranked ‘Unique, aesthetically appealing speciality timbers for flooring, furniture or cabinet work (inc veneer)’

– 26% ranked ‘Sustainably produced timber traceable back to a Victorian farm’ – 24% ranked ‘A naturally durable timber (Class 1) for exterior uses.’

The least important area of interest was ‘Tendering for discounted timber products when available.’

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Most important single area of interest comparing all groups: Priority 1

Figure 24: Most important single area of interest all respondents

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Figure 25 shows the most important single area of interest for each type of subscriber:

– Architects ranked as their number one priority searching for durable timber (42%), followed by unique specialty timbers (38%)

– The timber industry ranked as their number one priority ‘Finding a substitute for treated pine’ (28%)

– Builders ranked as their equal number one priorities ‘Finding a substitute for treated pine’ (33%) and a durable timber (33%)

– DIY builders ranked as their number one priority unique specialty timbers (56%) – Design and environment groups ranked as their number one priority sustainable traceable

timber (40%), followed by unique specialty timbers (30%) – Government and education ranked as their number one priority searching for durable timber

(54%).

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Most important single area of interest comparing all groups: Priority 1

Figure 25: Most important single area of interest comparing all groups

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Discussion Niche market products tend to be at the premium price end, chiefly because small scale producers cannot achieve the economies of scale of the large industry players and cannot compete with low-priced, illegal timber imports. Seeking high value markets compensates for the low volumes produced. Control of an integrated supply chain from harvest through to processed product enables a small scale producer to take advantage of profit margins as you move up the value chain. Aggregating small scale producers into a company or cooperative mitigates diseconomies of scale and enables single desk marketing. In the marketing of its locally available, specialty timbers, SMARTimbers has taken this route. While mass marketing is aimed at everyone, targeted marketing is tailored to suit a defined audience. A marketing strategy for an agribusiness “needs to identify who your clients are, what sort of product they are interested in, how you can best promote your product to them, and most importantly how you can provide your product to them in a way that satisfies their needs” (Campbell White and Associates Pty Ltd and Black 2002). SMARTimbers’ marketing strategy specifies architects as its target market and the cooperative has developed its ‘marketing mix’ of products, price, promotion and distribution to reach this group of customers. The success or otherwise of SMARTimbers’ marketing strategy was the subject of this project’s market research and is discussed below, along with more general comments about improving a cooperative’s marketing strategy. Identifying the target market and buyer behaviour An important lesson learnt by niche growers is the need “to establish reliable market outlets based on strong relationships with a small number of buyers” (Race 2002). In the past, SMARTimbers selected architectural firms randomly from the Yellow Pages or by hearsay. Clients have been largely sourced by the Marketing Officer sending out marketing kits and then calling on prospective clients within a defined area; or through ‘word of mouth.’ The following discusses what sort of firms and their clients were interested in SMARTimbers and why. Small-medium scale architectural firms offer best fit All three surveys confirmed that small (up to 5 employees) and medium scale architectural firms (5-20 employees) had the greatest empathy with SMARTimbers’ focus on delivering sustainable timber products traceable back to a farm plantation. Small-medium scale architectural firms demonstrated a higher degree of interest and empathy in sourcing traceable, local, farm forest products and unique specialty timbers. In large firms, ‘front of house’ receptionists proved very good at preventing access. In small-medium scale firms it was not only easier to get through to the right person, but they also proved more interested in SMARTimbers’ objectives. As Millward Brown commented, the data from the phone surveys shows that small firms were significantly less likely to be involved in commercial work, such as office and retail development. Most of those clients and interested firms that were selected for the face to face interviews and the focus workshop, proved to be involved primarily in domestic work (e.g. residential and holiday house construction).

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Small-medium scale firms most likely to retain control of specifying Architects retain control over product specification when they have a relationship with a builder. Over three quarters of small to medium firms interviewed claimed to use preferred builders, with whom they nominated preferred suppliers. One small firm participant in the focus workshop forcefully asserted that he would always retain control over specification of products; and this, in his experience, was the route taken by most small architects using preferred builders. Participants in the focus workshop were of the opinion that small to medium size architect firms retain a high degree of control over products specified for a building project. In contrast, large architectural firms tend to employ construction managers who are mainly interested in attaining the cheapest price possible when purchasing products. This comment is based SMARTimbers’ own experience, and was confirmed by participants in the focus workshop. Furthermore, the face to face interviews found that the larger firms relied on outside advice, such as representatives from visiting timber suppliers, to a far greater extent than small firms. Clients of firms mostly driven by price While small-medium scale architectural firms characterised themselves as ‘green’ in intent, their clients by and large are unfortunately much less committed to the pursuit of sustainability. Surveys demonstrated that clients were primarily concerned about price. Where they did want to use a different timber, it was mainly due to seeking something that was different in appearance. Although most firms said they thoroughly researched the sustainability of timber products, when the crunch came, a third in the face to face interviews said they often compromised taking into account cost and other factors. In total, the majority of visitors to the SMARTimbers website, including architects, were mostly interested in tracking down a different, aesthetically appealing timber or finding a durable timber. In the website survey, only designers and environment groups ranked using sustainable timber as a number one priority. There needs to be caution when interpreting peoples’ attitudes and values as a means of understanding their behaviour, as a complex range of factors can lead to a disconnection between attitudes and behaviour. For example, a positive attitude in favour of environmental sustainability may not translate into landholders undertaking changes to their farm management if they are constrained by the high cost involved (Vanclay and Lawrence 1995). A similar effect can occur with buyers. Some research has suggested that consumer-stated willingness to pay a premium for green products is overstated, with consumers only willing to pay a minimal premium of 5-10% (Cary et al. 2002). Research on forest products in 2002 found there was not a sustained willingness to pay more for environmentally labelled wood products. This is still the case in 2008, particularly for domestic consumers which form the basis of SMARTimbers clients. (For industrial-scale products, anecdotal evidence suggests that the broader market is starting to show more sympathy to green timber products; however any impact is likely to take a while to show because while forests are certified, products are not yet certified, marketed or recognised by buyers as such (Forest and Wood Products Australia pers comm.).) Of the small proportion of SMARTimbers’ clients not fussy about price, this project’s market research shows that most sit at the upper end of the market with high incomes and a heightened sense of design, aesthetics and the long term value of investing in quality. This group was not correlated in the market research by profession, degree of education or other factors such as art appreciation, for instance.

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Attitudes of builders In SMARTimbers’ experience and as confirmed in the focus workshop, builders are primarily cost-conscious in their purchasing decision-making. They are interested in ease of product use and express little concern about sustainability. Face to face interviews and the focus workshop highlighted the importance of targeting builders. Almost a third of those firms surveyed in the face to face interviews, said they trusted the advice of their builders. Local government and government agencies Local government is one niche that expresses interest in quality, sustainable products, which will perform well into the future. Long term, cyclical maintenance projections used by local government favour durable, long lasting products. Voter interest in the environment often translates into local government seeking sustainable products. A number of government authorities, such as Parks Victoria and the Victorian Department of Sustainability and Environment, specify the use of sustainable products in, for instance, the construction of boardwalks. Translating this rhetoric into action has, however, proven problematic for SMARTimbers. When the crunch comes, cost looms as a major determinant in making the final decision. And government authorities appear most comfortable in working with similar large scale organisations. This is partly based on their fears about the ability of small scale farm forestry groups to ensure consistency of supply. Identifying products for your market Having selected a target market, marketing involves undertaking research to discover what products you could supply to fulfil an unmatched need within that market sector. To differentiate your product from competitors, comparative advantages and ‘unique selling points’ require identification. Trying to convince your target market to buy something they don’t want can be extremely expensive and is seldom successful. According to Manwaring (1992), agribusiness marketing groups have to ensure they have a strong customer orientation, and beware their natural tendencies to push the products that they like producing themselves. Matching products to market demands The phone surveys confirmed that decking, kiln dried hardwood flooring and cladding are the key timber products used by architects – in that order. This largely matches SMARTimbers’ sales experience. The majority of SMARTimbers sales are for decking, then cladding. Few alternatives exist for high quality hardwood exterior products. Consistently across all surveys, sugar gum’s major attraction to architects is its Class 1 natural durability rating. That’s its unique advantage, which only similarly priced ironbark and tallowwood can match – and they are both as difficult to source as sugar gum and come with different characteristics. Then sugar gum’s tan colour and unique appearance come next, with its sustainable sourcing a distant third. SMARTimbers experience with the provision of sugar gum flooring demonstrates the importance of a farm forestry group scoping the marketplace to determine what products already exist and whether or not what you intend to produce is distinctively different. While small-medium scale architect firms are attracted to locally produced specialty timbers in principle, the following example demonstrates that they need to display unique characteristics in practice in order to close a sale. In 2005, SMARTimbers added kiln dried sugar gum ‘secret nail’ flooring to its product range. Coincidentally, this was one of the new products sought by architects in the focus workshop, and it is

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second on their list of timber products that small-medium scale domestic architects most use. Interestingly, few sales of sugar gum flooring have been made, despite placing it on SMARTimbers’ website product listing. A wide range of hardwood flooring products exists in the market place. Where durability is essential to the long life of an exterior product exposed to the weather, it is not a necessity for flooring, which gains its longevity and appearance from the coating applied. Thus, as flooring, sugar gum displays no readily apparent unique characteristic that makes it stand out in a crowded market place. The niche should not be too small It is not worth occupying a niche that is so small that your group makes no profit. Whatever your specialty timber, do your homework by seeking market sectors large enough to provide a rate of return that justifies processing and administrative costs, taking orders, handling and transport. The margin has to encompass all these costs, as well as return a profit. The precursor to SMARTimbers began by focusing on supplying sugar gum to furniture makers. This proved fruitless as the specialty timber furniture market was miniscule within the recommended transport distance for central Victoria (i.e. the standard 150km beyond which freight costs are considered prohibitive). It doesn’t take much timber to make a table, chair or sideboard, so even at high wholesale prices of $2-3,000/m3 kiln dried, the intense servicing requirements combined with low volume orders leads to miserable returns. Another failed product line has been veneer. Although holding out the promise of high returns of more than $14,000/m3 retail, combined with low production costs for rotary peeling of veneer, the reality was that only tiny amounts of veneer are needed to cover even the biggest board room table. Orders for $30 worth of veneer to cover a single piece of furniture are prohibitively expensive to deliver – particularly given veneer’s fragile nature. Attempts to get a retail veneer supplier to buy in large volumes of sugar gum veneer were met with no interest. Price setting Because of the low volumes processed, the price of specialty timber products is likely to remain high when compared with high volume products that can take advantage of economies of scale. The price of SMARTimbers sugar gum products was regarded as high compared to, for instance, merbau or treated pine. No matter what the product, many buyers will apply pressure to reduce the price to match the lowest common denominator. In the case of specialty timbers, taking this route is commercial suicide, given innate higher cost margins at every stage of the supply chain from harvesting to dressing. Moreover, the marketing literature contends that setting the price of premium products to match commodity products sends confusing market signals. Premium Australian hardwood furniture maker Natural Selection provides a case in point. Cheap furniture imports flooding the market have put most Australian furniture makers out of business. Not so Natural Selection, which has expanded from two employees 14 years ago to 25 in 2007, and has a turnover of $3 million. Owner Graham Hunt attributes the company’s success to its philosophy: “aim for a premium market, even if it means your products don’t come cheap.” The first part of a premium pricing strategy would be to highlight ‘unique selling points’ that differentiates a farm forestry group’s products from commonly available products. Merbau and treated pine are, for instance, inferior in terms of durability and sustainability as exterior products. Clients said they preferred using native to exotic species. But what proportion of clients, one wonders, are aware of the species and background of the timber they are using? You will need to take steps to communicate the differences between your products and those of your competitors. Taking advantage of the comparative advantages of farm forestry groups is discussed in the next section ‘Branding the business.’

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Second, a farm forestry group has to set its prices so they match its closest competitors. While this project’s surveys demonstrate a degree of price elasticity on the part of architects and their clients, a wide pricing gap would act as a major barrier to product take up. Consider how important price was to clients and builders in the phone surveys. And few were prepared to pay a 10% premium for sustainable sourced timber. SMARTimbers follows a price setting strategy known as ‘backward pricing.’ Product prices were initially determined by scoping what our closest competitors charged, then setting our prices in the top bunch, but not at the head of the pack. We matched jarrah prices, for instance, exploiting its weakness as Class 2 durable timber and its increasing rarity in the market place. We positioned SMARTimbers’ products behind recycled timbers in price, so we could not be accused of being the most exhorbitantly expensive. This strategy then requires working backwards, calculating all costs from log purchase, to harvest, processing, administration and marketing. The margin between wholesale and retail needs to be at least 30% at the end of this exercise. This is the generally accepted minimum gross profit margin for many businesses (FDAnews 2007). Such is the case with SMARTimbers, which divides its 30% wholesale margin three ways to cover administration, marketing and returns to the cooperative’s trading members. For further detail see the SMARTimbers booklet Realising the potential of farm forestry (Lang et al. 2007). Finding ways to track and minimise harvesting and processing costs is clearly crucial to the long term viability of a farm forestry trading business. This is the next task that SMARTimbers has set itself. Branding the business How a business is perceived is crucial in appealing to its target market. Perception is, indeed, reality. What is it that most appeals to our target market about the nature of SMARTimbers, our service and our products? How do we put a distinctive stamp on the way we do business? Have a clear message that differentiates you from competitors One of the prime natural competitive advantages of a farm forestry trading group is its personalised nature, with products easily traceable back to a farm forest or plantation. Being local, community-based, environmentally-oriented, occupying a unique niche, personalised and proactive in direct marketing were all regarded as positives in the face to face interviews. Architects visiting the website who filled in the Subscriber questionnaire were, first, seeking durable timber, then looking for sustainably produced timber traceable back to a Victorian farm coming a close second, and thirdly seeking, unique, aesthetically appealing specialty timbers hard on its heels. These areas of interest augur well for SMARTimbers and farm forestry groups in general. Other larger industry players cannot compete on this playing field of offering a regionally specific, different timber traceable back to the individual grower.

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0%5%

10%15%20%25%30%35%40%

SustainableTraceableTimber

UniqueSpecialtyTimbers

Durable Timberfor exterior

Treated PineSubstitute

Construction Tendering

Most important areas of interest: Architects Priority 1 or 2

Figure 26: Most important areas of interest for architects. Participants in the focus workshop agreed that the farm forestry story offered an appealing mix that they could ‘sell’ to their clients. But no single part on its own was as important as the sum of the whole story, they said. And while this ‘story’ provides a major point of difference with larger industry players, farm forestry groups cannot take this perception for granted; they have to make sure this message is communicated to their target market. Workshop participants thought that SMARTimbers had failed to make our mix of messages explicit in either our promotional pamphlet or marketing kit. We brainstormed the elements of SMARTimbers message, then asked workshop participants to rank them. As suggested by participants, this message now forms the opening page of our marketing kit. It was also suggested that testimonials from satisfied past users of SMARTimbers’ products could highlight the range of benefits farm forestry offers. How important is being sustainable? As is implicit in SMARTimbers’ name, the founding directors considered the supply of ‘Sustainably Managed Australian Regional Timbers’ as the crucial difference between a farm forestry trading group and a timber mill or larger industry player. Although important, the market research clearly demonstrates it’s only part of the mix. Even the ‘greenest’ of domestic architects sympathised with the difficulties and high cost involved in farm forestry groups gaining formal certification. Certification of timber products can be achieved through either the Australian Forestry Standard or Forest Stewardship Council. Where architects require certification, it’s usually for commercial construction. SMARTimbers’ localised operations and single species focus were not considered complex enough to warrant certification. Most of the small scale, domestic-oriented architects said that all we need to do is tell our story, tracing the journey of SMARTimbers’ products from farm plantation to the market place. The website now carries a Warranty of Origin signed by the SMARTimbers Chairman, Andrew Lang. It documents the stages in SMARTimbers’ integrated supply chain from harvesting sugar gum logs on Western District farms (mainly co-operative members) to alliances with a local sawmill and processor through to single desk marketing.

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Promoting the business Market penetration involves increasing your customer base through advertising or some other form of promotion. Based on the market research results, the methods for improving market penetration are discussed below. Direct marketing as the preferred avenue of learning The surveys have confirmed that, for architects, their preferred way of learning about new products is via face to face meetings. A common suggestion has been to select a firm, ask them to call in allies, then lure in the targets by offering a stylish, free lunch (e.g. sushi as offered by SMARTimbers in the focus workshop and met with approval). Subsequent to the phone surveys, SMARTimbers held a successful seminar at the Wool Museum in Geelong with local architects introducing them to SMARTimbers’ products and principles. Survey results helped determine the format and content of the workshop, such as the supply of local wine and food as an inducement to attend. SMARTimbers regards this format as a forerunner for other luncheon workshops. Given that builders appear largely price-driven, farm forestry groups supplying specialty timber products ignore them at their peril. This project’s market research indicates that the most effective route could be to hold face to face meetings with clusters of preferred builders used by architect firms. Selection of clusters could be based on either regular clients or on an opportunistic regional basis. The focus workshop, for instance, recommended seeking out architects and builders working on the south west coast as a logical fit with SMARTimbers products. Homes on the coast are exposed to corrosive salt and climate attack, and sugar gum exterior decking and cladding are ideally suited to combat this. As a result of this recommendation, the SMARTimbers Marketing Officer has already met with builders on the south west coast. It seems they prefer early morning meetings. Website as another avenue of learning The phone and face to face surveys showed that SMARTimbers’ target group of small-medium scale architectural firms relies heavily on the internet as a source of information when seeking products. Over two-thirds cited the internet as the primary source of information in the phone surveys. Architects commented that well presented and designed information is more likely to win over a client to approving specification of a particular product. Clients, as already noted, are impressed by appearances. Both architects and clients wanted ‘case study’ photos of products in situ. The website now has three pages of photo case studies (see Figure 27). Builders visited the website infrequently, which is a source of concern given their high degree of influence on what products are actually specified. Other more direct forms of promotion need to be explored in future as part of the marketing strategy. In rolling out EcoAsh, Forest Enterprises Australia held trials demonstrating, for example, use of nail guns, gluing and stain applications as a means of boosting builders’ confidence in using this new timber product (Cannon and Innes 2007). SMARTimbers challenge is to link its website with other more widely used building product websites, thereby raising our profile. This is a challenge that is yet to be achieved. Linking to websites such as the popular Ecospecifier site – like other forms of advertising – comes at a cost that needs to be included in future budget projections. Another way of boosting knowledge about the website, would be, as suggested in the focus workshop, to broadcast email small and medium scale architects. First, a group would need to build a data base spreadsheet with contact details before it could take the next step and send out a broadcast email. Steps would need to be taken to ensure there were no breaches of anti-spamming legislation.

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Figure 27: Example of one of the three case study pages from menu on SMARTimbers website. Adapting the Subscriber menu to become a free registration site To recapitulate, as part of the market research, the SMARTimbers Subscriber menu included a brief questionnaire to determine type of visitors and their specific interest in specialty timbers. This was designed to overcome one of the major problems with websites: while they may record a huge number of hits, you may still have no idea whether they are just bored teenagers or genuine prospective clients. Filling out the Subscriber menu questionnaire acted as a pre-condition of gaining access to essential information contained within the website’s Subscriber menu button, such as product price lists and an associated quoting calculator. Over two-thirds of those in the phone surveys said, yes, they would be interested in free registration on the SMARTimbers website for technical and product information updates. The focus workshop participants showed resistance to paying even $50 to register on the website, but it was suggested that SMARTimbers develop an ‘intellectual package’ of information, for which the co-operative would charge. An alternative could be to place this intellectual package in the Subscriber menu. The Subscriber questionnaire has served its purpose in demonstrating that architects are, indeed, major users of well-designed product websites, as well as determining the proportions of other categories of website visitors. It acts as a barrier to entry, and it is intended to remove the questionnaire. Instead, for website visitors seeking product pricing, SMARTimbers will offer ‘free registration’, whereby such visitors provide contact details in return to privileged access to an ‘intellectual package’ of information, as suggested by the focus workshop. By capturing contact details through a free registration site, SMARTimbers will be able to build a data base that could act as the springboard for broadcast emails alerting firms in our target market of new products, case studies and the latest technical information.

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Use of marketing kit for gaining market entry Before visiting or calling firms, Nolline Williams’ first step is to mail out the marketing kit. The impressive nature of the kit was seen as crucial to her getting a foot through the front door of most architectural firms. Its attractive design, range of samples and extensive and professionally produced contents, made it far more likely that the firm’s timber specifier would listen attentively to her pitch. After the phone surveys, SMARTimbers changed the marketing kit folder from clear plastic portfolio style to a hard back lever arch ring binder folder that would stand upright on a shelf. This was regarded as the preferred format for ease of accessibility. To make it stand out from the crowd, SMARTimbers uses a red folder (as opposed to the standard white or black) and has had a bold, cheeky cover designed. The glass of chardonnay on decking is supposed to signal SMARTimbers’ placement at the upper end of the domestic market, servicing the discerning client (see Figure 28). Architects, in particular, seek technical information, outlining product characteristics. Clients, as noted, liked to see pictures of products in use. In response to the face to face interviews and focus workshop, further additions to the marketing kit have included: • A page upfront outlining the key elements of the SMARTimbers message; • A Warranty of Origin letter signed by the co-operative’s chairman; • A glossy 2 page flier with examples of products in use combined with testimonial quotes from

users along the value chain; e.g. architects, builders, developer and DIY home builder; and • Provision of a form in the kit, which architects can fill in and fax, requesting more samples.

Figure 28: New design in response to architect feedback from phone surveys.

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Addressing risk and perceived limitations Marketing revolves around delivering a quality product, efficiently and in a timely fashion. The personalised nature of farm forestry groups should make the first criterion achievable – as demonstrated through this project’s market research. When it comes to actual delivery of service, claims of personalised service have – obviously – to be backed up with quality assurance, ease of accessibility, and efficiency of quoting and delivery. All of these were ranked equally highly in the phone surveys as qualities that architects would expect as part of the bundle of personalised services. SMARTimbers was generally recognised as offering a conscientious, personalised service. There are, however, perceived limitations facing farm forestry groups across these three marketing criteria that require addressing. Doubts about the quality of specialty timber While there was an expressed preference in the market research to using native Australian species in preference to exotic species, one of the top concerns with sugar gum was its unpredictability compared to artificial products like steel, concrete or plastics. Yet movement, shrinkage and colour change are part of the natural dynamics of timber. Farm forestry groups need to allay fears by providing sought-after technical information on the characteristics of their particular specialty timber. SMARTimbers backs up its sugar gum decking, cladding and flooring with information sheets on how to fix each product in place. There is however, a wider problem. Many specialty timbers have not been adequately scientifically assessed. Sugar gum, for instance, lacks a fire rating, although as an extremely dense timber it is likely to prove fire resistant. Moreover, architects, builders and their clients require education about the benefits of using timber compared with man-made products. Proving consistency of supply In the face to face interviews, the two greatest perceived limitations of SMARTimbers were supply fears and the lack of a track record. First, builders, in particular, do not believe SMARTimbers is capable of ensuring consistency of supply. In reality, the cooperative is conscious of the need to hold adequate stock reserves. We have deliberately restricted the number of product lines to aid this objective, as well as providing clarity about where our core products excel (i.e. durable and long lasting, ideal for exterior uses). We also have sufficient quantity of mature resource to supply current and future market needs. Second, many clients said in the surveys that they preferred to do business with suppliers with whom they had a ‘long lasting relationship.’ Clearly, this places relatively new businesses like SMARTimbers at a distinct disadvantage. The focus workshop thought the only way around this Catch 22 was to fast-track the building of relationships through assiduous (yet sensitive) personal contact – preferably face to face rather than via phone or email. Offering free associate status to the small group of architects and builders that regularly order SMARTimbers products could be worth pursuing. Efficient distribution Easily accessible distribution is vital to product take up. No matter how good the quality, without a distribution channel, the product (in the case of farm forestry groups) will remain sitting in a shed. Efficient marketing is often regarded as creating a wide range of outlets. Dissatisfaction with SMARTimbers’ limited range of retail outlets, as well as limited range of species and products, were another two major areas of concern in this project’s market surveys. Solutions are not easily available for physically increasing distribution outlets, nor diversifying the range of products. Farm forestry

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groups are likely to have limited capital, limited access to their specialty timber and lack the cost advantages offered by economies of scale. Increasing the range of retail outlets More retail outlets would lower the margin of return to SMARTimbers’ members to unviable levels. As discussed, SMARTimbers ‘trade’ price that is offered to architects and builders delivers the necessary profit margin to pay the Marketing Officer, administrative costs and deliver a return to trading members. It is, however, only 40% below the recommended retail price. Retail hardware outlets, in SMARTimbers experience, demand far greater mark ups – more like 100%. The website provides a universally available point of access for detailed technical and commercially relevant information about SMARTimbers’ products. Surprisingly, no one took the opportunity to submit an order via the ‘button’ in the Subscriber menu to Marketing Officer Nolline Williams. A webmaster has suggested that gaining commercial commitment via websites requires offering free, extra products or services and/or discounting from listed prices. The lead time between an architect specifying and a builder ordering a product is generally a month. It would not, therefore, seem crucial that a farm forestry group provide off the shelf products available on demand: there is time to customise if necessary providing the wood is already harvested, dried and stored. One builder commented that many in his trade too often leave ordering to the last minute. This would seem to provide another reason for a farm forestry group to channel their marketing through architects, rather than going direct to builders, who seem culturally habituated to taking the easiest as well as cheapest route. Increasing the range of products In the surveys, architects also expressed a desire for a wider range of products. SMARTimbers’ narrow focus meant that it was marked down in the innovation stakes. According to the Ansoff Product-Market Growth Matrix, new product development is a crucial business strategy for firms to stay competitive. It is characterised as far less risky than diversifying into new markets. But creating new products is not a risk-less exercise and requires research and investment, two major constraints facing new businesses and young industries (Campbell White and Associates Pty Ltd and Black 2002). Should a farm forestry group move into developing a product considered risky by other timber suppliers, even though it fills a market niche with an apparently high demand? The architects surveyed consistently expressed, for instance, a preference for SMARTimbers to add wider, 135mm boards to our range. While this course has now been taken, it was not without anxiety. Wider boards are more susceptible to cupping and movement, which probably goes some of the way to explaining why they are not readily available. Architects would like a squarer, sharper profile as it suits their preference for clean lines. There is, however, a practical reason for a rounded pencil edge on decking: it is less likely to splinter in exposed conditions. Provision of ‘off the shelf’ sugar gum veneer mounted on plywood or MDF was seen by a number of architects as an exciting innovation that would be well received by their profession. The same goes for thick, 40mm glue-laminated stair treads. Not only is there a high cost involved in putting these products together, but there is also a still a degree of uncertainty in whether the glue would take. Dense timbers are notoriously hard to glue, as SMARTimbers has already discovered when some early attempts to double the thickness of our 19mm decking came unstuck. A report canvassing prospects for low rainfall agroforestry (Zorzetto and Chudley 1999) recognised that striking into new territory brings increased costs and risks. While concluding that laminated

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flooring and MDF appeared “promising” as new sawn hardwood products, the report added as an immediate qualifier: “However, issues of scale, costs of production and processing, and the potential market penetration are still uncertain. These factors are likely to inhibit potential and work against an economically viable operation.” Focusing on a single species and a defined range of products simplifies the message a farm forestry group has to get across to its target market. Neville Kitchen, owner of successful niche business Maton Guitars, turned around a failing business by focusing on producing one top quality model. “I think you’ve got to put all your energies and your money into perfecting what you’re best at doing,” is his advice to niche producers. The more products you have, the greater the costs, and the greater the danger of being left holding an ‘unpopular’ product line. With qualifications, the simple, targeted approach was approved in general by the focus workshop participants. A way to address the dilemma of becoming too narrowly defined could be to seek investment funds, in order to incrementally research and develop innovative products that both serve a market need and raise a farm forestry group’s profile as on the cutting edge and being leaders in their chosen market niche.

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Implications for farm forestry groups and marketing Target small-medium scale architectural firms for niche building products Building alliances with those firms that use preferred builders ought to be a marketing priority for a farm forestry group. Small to medium size firms are more likely to be found in regional centres. To take advantage of this opportunity, farm forestry groups will need to find efficient means of aggregating and transporting product. If you choose to target other market audiences, the advice on market focus in the R&D Plan for the Native Food Industry 2001 – 2006 (RIRDC 2001) is worth heeding: similar to farm forestry the native food industry is small scale, fragmented, intensive and low volume. In young industries, claims this R&D Plan, poor understanding of existing and potential markets “can lead to participants not focussing their scarce resources on the potentially most rewarding sectors of the market.” Tailor product ranges to suit local needs Farm forestry groups should undertake an inventory of their locally grown species – indigenous and exotic – searching for those that match market gaps in their region. A farm forestry group’s selected specialty timber species needs to display unique characteristics that sets it apart from other timber products available in its region. In any sort of market you need an edge (Race 2002). In the initial phase, focusing on a single specialty timber species and a small, defined range of products provides clarity of purpose for purchasers, and reduces processing costs borne by the farm forestry group. Find a niche large enough to provide a decent rate of return Groups need to make sure that the niche they aim to occupy is not so tiny that their farm forest group has no room to make a profit after accounting for outgoing costs. Each farm forestry group ought to embark on a business plan that includes a full-blooded cost/benefit analysis, taking into account the size and the potential annual volume of sales. How many years will it take you to reach break even? Can you afford to wait? R&D funding ought to target supplying back-up technical information for niche forest products that hold the potential to provide a decent rate of return. While the farm forestry story is very appealing, it cannot be taken for granted Being Australian, community-based, environmentally-oriented and occupying a unique niche were together seen as a powerfully appealing mix by both small-medium scale architectural firms and their clients. This mix offers a clear differentiation between farm forestry groups and other industry players. But each farm forestry group will need to spell out its own particular story early, simply and clearly. Proof of traceability rather than formal certification Most of the small-medium scale architectural firms only required that a farm forestry group provide some sort of guarantee about its timber products’ source via, for instance, a signed letter from the chairman at the front of the marketing kit tracing their products’ journey from farm forest or plantation to the marketplace. Note that this strategy requires a farm forestry group to build alliances along the whole of their supply chain, as recommended in Wettenhall and Henderson (2003) (RIRDC Short Report No.127, Farmwood Australia – export markets for farm-grown wood).

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The above is a stop-gap solution until appropriate and affordable certification processes for farm forestry groups are developed. Implement and build personal one-to-one to build strategic relationships Farm forestry groups will need to get out and about, and hold face-to-face meetings with potential customers, according to the survey results. This is a task that ought to start some time before a group’s products became available, as the surveys indicated strongly that firms preferred dealing with suppliers they knew well. An allied major concern was the ability of small scale suppliers to provide consistency of supply. Survey results highlight that fears about new players and new products cannot be assuaged over the phone or other remote forms of communication. Given limited funds, time and other resources, farm forestry groups will need to be very strategic in how they invest in building personal relationships with their potential target audience. Heavy reliance on the internet by small-medium scale architectural firms when seeking product information In general, there is a need to develop farm forestry profiles and specialty timber product information in order to take advantage of the internet. Where a farm forestry group is marketing a little-known specialty timber, technical information must back up claims made for your specialty timbers. Also, farm forestry groups ought to consider producing case studies in glorious full colour and posting them on the website. Groups could build closer ties with their target audience by offering incentives that encouraged free website registration as ‘associates.’ To combat builders’ infrequent use of websites, other promotional methods need to be pursued, e.g. demonstration trials. Developing a technical manual on specialty timbers that was aimed specifically at builders could also help fill the information gap. Producing a professionally produced marketing kit provides an ongoing presence for specifiers and their clients A marketing kit is the flagship showcasing a farm forestry group’s wares. It should be professionally produced and stand out on a shelf. Glossy brochures with pictures of products in situ also help in winning over their clients. All types of firms as well as builders want to see, touch and feel product samples. A range of educational and consumer awareness programs are required to aid market penetration Suggested actions are: 1) Design educational material suitable for architectural and building courses that would aid sustainably specifying timber products. SMARTimbers ‘state of the art’ marketing kit could act as an educational resource. 2) Deliver a project to negotiate protocols which ensure government agencies follow through on their sustainability promises and intentions. 3) Increase school children’s awareness (in preparation for future market awareness) of sustainability, carbon trading and embedded energy of products. Scope primary and secondary education curricula for content on local timbers’ superior sustainability performance in product applications. 4) Launch a visual mass marketing national campaign , based on case studies highlighting the sustainability of using local timber products.

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Recommendations The following recommendations aim to improve short and long term development of improved farm forestry marketing of products, and increase public and market awareness of the quality and sustainability of Australian timbers: 1. Improve the availability of contact lists for builders and architects by funding Private Forestry

Development Committees (PFDCs) to prepare database spreadsheets of small-medium scale architectural firms and their preferred builders on a regional basis. Use this to survey a sample in each region by phone to determine timber products most used, as well as timber products most wanted, in an attempt to identify market gaps. Include questions to elicit their knowledge and attitudes for or against specifying farm forestry products.

2. Representatives of farm forestry groups (e.g. PFDCs) should hold focus workshops in each region

with those small-medium scale architectural firms which rated most favourably as a result of the phone survey. The aim of the workshop is to build personal relationships with potential customers, so that target markets and a defined range of products are identified by harvest time. Focus workshops may not be appropriate in regions where there is a long lead time to harvest (more than five years).

3. Given the internet as a primary source for product information, create a site within Australian Forest

Growers’/The University of Melbourne’s Farm Forest Line (www.farmforestline.com.au), which hosts profiles of farm forestry groups (see also Recommendation 15) and information about their specialty species and products, in particular:

• Their story listing the steps to traceability; • Case studies with photos; • Background technical information (see also Recommendation 18). 4. To extend market penetration, JVAP should provide research funds to investigate the feasibility and

cost of linking farm forestry websites to other internet supply outlets most visited by architectural firms.

5. Fund production of a technical manual on major Australian hardwood species and their performance

characteristics aimed primarily at builders. This should include pictorial studies of products in application and be produced in association with the Master Builders Association.

6. Provide SMARTimbers and other farm forestry groups’ marketing folders as master files for

students at the architecture, design and building courses of universities and TAFEs nationwide. 7. As part of its new marketing role, Forest and Wood Products Australia (FWPA) to design

educational material suitable for architectural university courses and building courses in all states, on the sustainable benefits of specifying Australian hardwood timber products. Design curricula content in association with a steering committee including JVAP, A3P, AFG, NAFI and relevant university and building course stakeholders.

8. Fund leading farm foresters, selected via Australian Forest Growers, to talk directly to students at

universities and in building courses in all states. 9. Provide funding via Plantations Vision 2020 for PFDCs to meet with local government, catchment

and NRM/parks/water agencies, with the aim of negotiating protocols for the implementation and monitoring of those organisations’ declared intentions to specify sustainably sourced timber products as their preferred use.

10. Adapt Ensis’s ‘Forest of Life’ program for take-up in Australian primary schools, to include

hands-on practical science demonstrating use of local, specialty timber species.

43

11. Ensure the sustainability of using Australian timber products, including specialty timber case

studies, is part of the curricula content of environmental subjects at secondary schools in all states. 12. The forest industry (JVAP and FWPA in association with A3P, AFG and NAFI) to launch a visual

mass marketing national campaign, primarily on television and billboards, that uses case studies of how choosing Australian plantation, farm and native timbers leads to more sustainable outcomes in everyday life than purchasing overseas timber imports or the use of steel, aluminium or plastic products. Possible examples are EcoAsh flooring, pine scantling, veneer, sugar gum decking and boardwalks, posts and poles made from local timber thinnings.

13. Fund AFG to complete development of appropriate and affordable certification processes for farm

forestry groups. Such processes could be based on individual landholders complying with a forest management template (this is in development but could be simplified in association with Master Tree Growers); then designing a self-auditing system delivered via approved farm forestry groups, such as SMARTimbers.

14. Fund a range of mature, farm forestry groups Australia-wide to develop brief profiles of their

activities and accompanying media kits. Provide public relations (PR) assistance to deliver kits to their local media.

15. These farm forestry profiles could also be placed on Farm Forest Line (along with

recommendation 3), with provision for annual updating. 16. Fund R&D on innovation in product development for specialty timbers; e.g. in fire rating testing,

developing plywood veneer and glue-lam applications. Such R&D is too costly and risky for fledgling farm forestry groups to undertake, and has application beyond individual regions.

17. JVAP to review major specialty timbers Australia-wide, with the aim of producing technical

information on hardness, durability, fire rating, shrinkage and movement, ease of machining and suitable product applications. Such information to be brought together in a manual with extensive graphics aimed primarily at aiding builders in the specification of Australian specialty timbers.

18. The technical information material on Australian specialty timbers gathered could also be adapted

for website access via Farm Forest Line to aid architects in the specification of Australian specialty timbers.

44

Bibliography Ansoff, I. (1957) Strategies for Diversification, Harvard Business Review, Vol.35 Issue 5, Sep-Oct,

pp. 113-124. Campbell White and Associates Pty Ltd and Black, A. (2002) Costs and Benefits of Diversification –

Whole Farm Case Studies. RIRDC Publication No. 02/029. RIRDC Project No. ECU-7A. Cannon, T. and Innes, I. (2008) Markets for Wood Products from Non-Durable Hardwood Sawlog

Plantations. In: Brown, A.G. and Beadle, C.L. (eds) Plantation Eucalypts for High-Value Timber – enhancing investment through research and development. Proceedings of a conference held 9-12 October 2007 in Melbourne.

Cary, J., Bhaskaran, S. and Plonsky, M. (2002) Green Marketing and EMS: Assessing potential consumer influence on EMS development in fresh food chains. RIRDC Publication No. 04/175. RIRDC Project No. VUT-3A.

Cary, J., Webb, T. and Barr, N. (2002) Understanding landholders’ capacity to change to sustainable practices. Bureau of Rural Sciences: Canberra, ACT.

Clinnick, P. (2004) Inside Australian Timber Marketing Co-operatives. Report to the Joint Venture Agroforestry Program, RIRDC Project No. CSF-59A and MS034-36 (unpublished).

Cook, D. (2005) Guitar maker survives on a string and a prayer, The Age. Dyason, R. (2006) A cautionary tale: the travails of trawling for a niche market, Australian Forest

Grower, Vol. 29, No.1, pp 24-25. Gujit, I and Race, D. (1998) Growing Successfully: Australian experiences with farm forestry,

Greening Australia Ltd and the Joint Venture Agroforestry Program. Higginbottom, D. (2001) Central Victorian Farm Plantations Inc Marketing Report, Competitive Edge. Hopkins, P. (2007) Evolution of a private company, The Age, 10 August. Lang, A., Wettenhall, G. and Fisken, D. (2007), Realising the potential of farm forestry: Making

money out of farm trees, SMARTimbers Cooperative Ltd. Manwaring, J. (1992) Becoming part of the marketing chain, The Australian Farm Manager, April

1992, pp. 12-13. Marks, N. (2001) Marketing is not selling, Australian Forest Grower, Vol. 24, No.2, p. 10. Pigdon, B. et al. (2004) Private Forestry Web-Based Notice Board Feasibility Study, Private Forestry

Council of Victoria, March 2004. Proceedings of National Farm Forestry Co-operatives Workshop, (1999) Getting Down to Business,

Cooloola Forest Growers Co-op Ltd, Brisbane. Race, D. (2002) Innovative use of farm trees: Australian marketing experiences. RIRDC Publication

No. 02/022. RIRDC Project No. ANU-49A. Reid, R. (1994) Making Farm Trees Pay, Greening Aus. and RIRDC. Rural Industries Research and Development Corporation (2001) Research and Development Plan for

the Native Foods Industry: 2001-2006. RIRDC, Canberra, ACT. Said, A. (2004) Private Native Forestry in Australia: Situation and opportunities, Proceedings of the

Australian Forest Growers Biennial Conference, Ballarat, pp. 118-122. Treegrower Co-operatives Newsletter (2001-2006). Series published by Australian Forest Growers. URS Forestry (2008) Farm forestry areas and resources in Australia. A report for the

RIRDC/L&WA/FWPA Joint Venture Agroforestry Program, Rural Industries Research and Development Corporation, Canberra, Australia.

Vanclay, F. and Lawrence, G. (1995) The Environmental Imperative: Eco-social Concerns for Australian Agriculture, Central Queensland University Press, Rockhampton, QLD.

van Herk, P. (2001) The pursuit of profits along the value adding chain, Australian Forest Grower, Vol. 24, No.2, pp 10-11.

Wettenhall, G. and Henderson, R. (2003) Farmwood Australia – export markets for home-grown wood, RIRDC Short Report 127.

Wettenhall, G. (2005) SMARTimbers Marketing & Sales Strategy, SMARTimbers Cooperative Ltd (unpublished).

Wikipedia Foundation Inc. (2008) Marketing. www.en.wikipedia.orgZorzetto, A. and Chudleigh, P. (1999) Commercial Prospects for Low Rainfall Agroforestry. RIRDC

Publication No. 99/152. Rural Industries Research and Development Corporation

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Timber trading websites: • Farm Forest Line website - www.farmforestline.com.au • Ecospecifier - www.ecospecifier.org. Lists suppliers of certified and recycled timber. • Farmwood Tasmania used to list its products and services - Farmwood.com.au • Spec-Net News is sent to each week to 8,000 architects, designers and builders – offers the latest

building products, materials and equipment. – Spec-Net@buildingindex.com • Timberdirect.com.au provides on-line ordering of Australian hardwood timbers for furniture

makers and hobbyists. • Timber Search is a database and search engine for Western softwood producers and wholesalers –

www.timbersearch.com • Example of major Victorian sawmill site (now defunct) - www.blackforesttimbers.com.au • Wilderness Society’s One Stop Timbershop listing recycled timber products -

www.timbershop.wilderness.org.au

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Appendices Appendix 1: SMARTimbers Market Surveys for project STM-1A– Research outputs Architectural Resources Market Phone Survey, Millward Brown, July 2006 (unpublished). Architectural Resources Market F2F Survey, Millward Brown, March 2007 (unpublished). Minutes of Focus Workshop with Selected Architects, Millward Brown, October 2006 (unpublished). Web Survey Analysis (Excel database spreadsheet), Peter Leman, April 2007 (unpublished). Search Terms Used To Find The Site – September 2006 to April 2007, Peter Leman, April 2007 (unpublished). Note: Copies of the research outputs are held by JVAP and SMARTimbers

47

Appendix 2: Market Survey Questionnaire Phone version, 18 January 2006 1. Introductory: Firm name and address…………………………………………

……………………………………………………………………..;

Contact person – name, position, & email:

………………………………………………………………………..

……………………………………………

2. What is the size of your firm?

(No. of people employed: Less than 5… ...; 5-20…… ; 20+…….. )

3. Where is your firm’s primary location for its operations?

(Melbourne……. Inner….. Eastern….. Southern….. Northern….. Western…..

Regional town……. Rural……. )

4. Firm’s type of work: Does it carry out mainly domestic, mainly commercial work

or a 50/50 mix?

(Mainly domestic…..; Mainly commercial……; 50/50 mix…… Government…….

Educational……. Other……………………….)

5. How long has the firm been going? (No. of years) ……….

6. List timber products that your firm uses? (Rank top 3 – 1st, 2nd, 3rd). Examples:

– green sawn timber for outdoor construction, e.g. joists, posts and rails;

– exterior decking;

– exterior cladding;

– kiln dried hardwood scantling;

– radiata pine scantling;

– glue-lam beams;

– kiln dried hardwood flooring;

– kiln dried appearance grade timber for furniture or cabinet work;

– veneer.

(1…………………………… 2…………………………..… 3………….………………….. )

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7. What do you believe is a reasonable lead time to be given to suppliers when

ordering timber products?

(Less than 2wk..… 1mth……. 2mth… .. 3mth…... 3-6mth…..More than 6mth.….)

8. Where do you normally source information on timber products?

(open – List top 3 sources)

(1………………… ………… 2……… …………………..… 3……… ….………………….. )

9. Having seen the SMARTimbers marketing kit, are there any aspects you

find appealing? (open) List and rank top 3 – 1st, 2nd, 3rd.

(1……………….…………… 2……… …………………..… 3………… .………………….. )

10. How could the marketing kit be improved? (open)

List and rank top 3 – 1st, 2nd, 3rd.

(1……… …………………… 2……… …………………..… 3…….…….………………….. )

11. What are the characteristics of sugar gum that you find attractive? (open)

List and rank top 3 – 1st, 2nd, 3rd.

(1………….………………… 2……… …………………..… 3…….…….………………….. )

12. What qualities do you value in your relationship with timber suppliers?

( Score importance on scale of 1 to 5. Most important 5; important 4; neutral 3;

not really important 2; unimportant 1):

– guaranteed high quality products (i.e. fit for purpose); …….

– long lasting;…..

– low price;……

– prompt delivery;…..

– sustainably sourced;……

– personalised service and follow through to delivery;……

– courteous;…..

– someone immediately answering phone every week day; …….

– prompt quoting (i.e. within 2-3 days);……..

– expert product backup;…….

– access to appropriate technical information;……

– comprehensive website ……..

– offers consistency of supply…….

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13. SMARTimbers focuses on speciality timbers that are not readily available and are

sourced from farm plantations and forests:

(Percentage ratings:– 6.Nearly all > 90%; 5.Most 75-90%; 4.More than half 60-75%;

3.About half 40-60%; 2.Less than half 20-40%; 1.Hardly any < 20%).

• What proportion of your clients are interested in sustainable sourcing tracing the

timber back to a particular place? ……

•What proportion of your clients are interested in different and unique timbers? ……

•What proportion of your clients select their timber products based on price?……

•What proportion of your clients are interested in using local rather than overseas

timbers?.......

•What proportion of your clients are interested in using native Australian timbers

rather than exotic species?........

• What proportion of your clients would pay a 10% premium for sustainably sourced

timbers?.......

14. Do you think you might do business with SMARTimbers in the future?

Yes…… No…… Maybe…… Not sure….. N/A……

15. If yes, would you consider registering for free on our website to access product

info updates, technical information, showcasing of products in situ, pricing and a

quoting calculator, or gaining the ability to tender for discounted products?

Yes…… No…… Maybe…… Not sure….. N/A……

16. If yes, which of these website services most interests you? (Choose only one of

the following:

– Product info updates…….

– Technical information……

– Showcasing of products in situ…….

– Pricing and a quoting calculator…….

– Gaining the ability to tender for discounted products……..

– Other [not listed]…………………………………………………….

#

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Appendix 3: Market Survey Questionnaire Face-Face version, 31 July 2006 1a. Introductory: Firm name and address…………………………………………

……………………………………………………………………..;

Contact person – name, position, & email:

………………………………………………………………………..

……………………………………………

1b. What is your role in the firm?……………………………………………………….

1c. How many years of architectural experience do you have?…………………

2. What is the size of your firm?

(No. of people employed: Less than 5… ...; 5-20…… ; 20+…….. )

3. Where is your firm’s primary location for its operations?

(Melbourne……. Inner….. Eastern….. Southern….. Northern….. Western…..

Regional town……. Rural……. )

4. Firm’s type of work: Does it carry out mainly domestic, mainly commercial work

or a 50/50 mix?

(Mainly domestic…..; Mainly commercial……; 50/50 mix…… Government…….

Educational……. Other……………………….)

5a. Do you have a preferred format for the marketing kit’s presentation?

(e.g. ring binder, portfolio folder……………………………………….

5b. Do you have an example of a marketing kit that is effective for you (e.g. appealing, informative,

easy to use – firm, kit date/reference)? ……………………..

………………………………………………………

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6. Have you used sugar gum? If yes, what do you see as its limitations?

(Top three – rank in order:

1…………………………………………….

2…………………………………………….

3 ……………………………………………. )

7. How do you seek new timber products? What is the process followed in your firm? (open)

8. To what extent do you research the sustainability of products that you specify?

(On a scale of 1-5 from Not At All to Thoroughly………..)

9. How would you expect SMARTimbers to prove to you its claims that it is delivering a sustainable

product? (open)

10. If SMARTimbers could trace the source of all its timber back to specific farm plantations that are

sustainably managed would that be as satisfactory as formal certification with a third-

party organisation?

Yes……… No……… Don’t know……………

11. How often do you use preferred builders? (percentage)……….

12. To what extent do you nominate preferred suppliers when briefing your builders?

(percentage)…………

13. If you don’t nominate preferred suppliers, how do you ensure your builder is choosing the best

quality and most sustainable products, rather than simply being price sensitive? (open)

14. Our phone survey found that a high percentage of clients want to use different timbers. What do

you think is the main reason for this?

(Main reason – i.e 1 only)……………………………………….

15a. What proportion of your clients are fussy about price? (percentage) ………

15b. What are the main characteristics of these clients and their type of buildings? (Top three – rank in

order:

1………………………………………………

2…………………………………………….

3 ……………………………………………. )

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16. What do you value about SMARTimbers?

(Top three – rank in order:

1………………………………………………

2…………………………………………….

3 ……………………………………………. )

17. What are SMARTimbers limitations?

(Top three – rank in order:

1…………………………………………….

2…………………………………………….

3 ……………………………………………. )

18. Our phone survey found that a high percentage of architects want access to high quality,

guaranteed products but prefer to source their products from suppliers they know well.

Given this, how do you suggest we might best enter the marketplace? (open)

#

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Appendix 4: Web Subscriber Questionnaire, SMARTimbers Co-operative Ltd, January 2006 * Name * Firm * Position * Email * Are you interested in (Rank in order 1 to 6): - Sustainably produced timber traceable back to a Victorian farm? .... - Unique, aesthetically appealing speciality timbers for flooring, furniture or cabinet work (inc veneer)? .... - A naturally durable timber (Class 1) for exterior uses? .... - Finding a substitute for treated pine?.... - Hardwood posts, poles, joists or beams for construction?.... - Tendering for discounted timber products when available?.....

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Contact RIRDC:Level 2

15 National CircuitBarton ACT 2600

PO Box 4776Kingston ACT 2604

Ph: 02 6271 4100Fax: 02 6271 4199

Email: rirdc@rirdc.gov.auweb: www.rirdc.gov.au

This publication can be viewed at our website— www.rirdc.gov.au. All RIRDC books can be purchased from:

www.rirdc.gov.au

This report outlines work conducted via SMARTimbers Cooperative Ltd in Victoria to test and adapt a single desk marketing structure suitable for use by farm forestry cooperatives. The project surveyed architects’ use of native Australian timbers, in particular sugar gum, and their preferred means of accessing and receiving information.

The report also considers architects’ level of control of timber choice and purchase by builders, and suggests ways of promoting a farm forestry cooperative and its products, including via web-based promotion. The report is relevant to farm forestry cooperatives, farm forestry extension and growers, forestry policy and research funders.

The Joint Venture Agroforestry Program (JVAP) is managed by the Rural Industries Research and Development Corporation (RIRDC).

RIRDC’s business is about new products and services and better ways of producing them. Most of the information we produce can be downloaded for free from our website: www.rirdc.gov.au

RIRDC books can be purchased by phoning 02-6271 4100 or online at: www.rirdc.gov.au/eshop

Viability of Group Marketing of Farm Forestry Timber

The SMARTimbers exampleRIRDC Publication No. 08/112