distribution forest cha nges Conference emphasizes need for dynamic in product

"Every lumber company that has stuck to the basic lumber industry-be he manufacturer or distributor-has either gone out of business, bankrupt or sold out to a more sophisticated conglomeration which does not sell lumber as such, but a product that will fill the need of the buver. the customer and the housing industry, whether it is a five foot shelf-board made in wood, flake-board, aluminum, plastic, steel or any other material."

RETAILER'S ROIE

Those were the words of Max Ratner, president, Forest City Enterprises, CleveIand, Ohio, spoken at the Fifth Annual Forest Industries Marketing Conference, Eugene, Ore. Emphasis at the conference was on the distribution of forest products, in which the retailer plays a key role. And in his role, the retailer's survival depends on his ability to compete and grow.

Ratner went on to say, o'Our retail distribution stores, to survive, had to expand the product line into related fields catering to the home owner.

"The annual statement from the largest lumber firm in the industry reveals that in the last ten years, they have changed their mix ftom 75/o in lumber and 257o otlrer fields, to 25% lumber and 75/o other fields," he said.

Taik Their Tanguage

Jerry Callner, president, Bonanza Home Center, another speaker, said, "Some thirty years ago my father, who was a pioneer in the retail building material business, said to me, 'If you want to make a success of the retail lumber and buildine material business. you must lorget you aie a lumberman.' His philosophy was that you must learn to talk the language of the consumer, you must satisfy his needs . . and you must try to fit in with his normal retail buying habits."

Callner went on to point out, "Little is done by the manufacturer to assure that his item, which was carefully created and manufactured, is properly sold by the retail salesman to the consumer. I suggest programs be developed by the manufacturer with the eid of the retailer to insure that tle retail salesman be instructed thoroughly in the product, and be inspired . .

"One of the prime ingredients that has contributed to the great revolution in re- tailing is the understanding and use of advertising and promotion. Unfortunately, those servicing the retail building material dealer, with some exceptiong have not kept pace with others serving the same general retail industry. In considering the proper o'sell" that must go into advertisit g "opy, I heartily suggest* that more consideration be given to the actual product being sold rather tJran the manufacturer's company name and trade name.

'oMuch of the literature produced-today is far too technical for the do-it-vourselfer. some is too sophisticated and h" has trouble relating to it, and so much does not answer

Sfory qt o Glqnce

Success means adapting to customers' needs business as usual can mean going belly up . , conference accuses parts of industry of lagging behind.

the simpler, elemental questions t}at he must have answered before he considers the purchase of that item. Retailers receive much o{ this type of literature and it is usually thrown out or put on counters or literature racks, there to stay for months to come."

Clark Johnston, director, sales and merchandising, Pope & Talbot, Inc., Portland, Ore., told the conference tha! "forward integrations that have swept the industry at all levels since 1950 show little sisn of slowing. This coupled with the "*o"rJ ""r- nomic pressures at the mill level in 1966 and 1967 and soaring log prices during the same period, have reduced the number of suppliers even further.

THE BUYER'S MOODS

'oWhat is the answer to preservation of our existing system? The dealers, and there are hundreds of examples, who have anticipated the changes in buyer's moods, who have modernized and updated their operations, who have geared their market. ing programs to use the many tools aveil. able from all sources have shown increased growth and rising profits. They have become modern merchandisers.

"The- successful producerg steeped in years of traditionalism, where the marker ing function was simply a distosteful by- product of production, have recognized that their place in the market has to be justified with quality, service, packaging and customer orientation," said Johnston.

R. H. Moore, director of procurement, Weyerhaeuser Co., pointed to the trend among larger firms to manage tleir distribution straight through to the final user, detouring intermediate firms that contribute to insta-bility. He said nearly 1O/s of hjs company's business is done using yearly sales and supply contracts. The contract aims at controlling the shalp rises and drops in price that characterize the industry. Moore said some large retail firms are reversing the process, making contracts for the supplies with producers.

John L. Kistler, national merchandise m-anager, building materials, Montgomery Ward, pointed to a revolution in b;ildins materials retailing. A monopoly on thi number of tradesmen admitted to trade unions as a result of unrealistic membership quotas could lead, he felt, to rises in cost of production, with subsequent development of methods and products which use less labor. Competition for available tradesmen results in rising construction costs. Transportation costs force a change in buying and distribution.

Gripes About Mitls

Also heard during the sessions were these sentiments. "The main gripe or comment that most of the mills had about the wholesaler was that some of them are not knowledgeable about the mill's production and also not knowledgeable of the capa- bilities of the mills. We have instances of wholesalers calling the same mills over and over again asking them for 22, and,24' dimension when the mill produces up to 2U," said James Shaw, president, SLawMickelson Lumber Co.. Medford. Ore.

"Now as to the mills improving their relationship with the wholesaler. Ali I can honestly say is to try to 'ship on time,,,' he concluded.

C. M. Snavel], president, Germain Lumber Co., Pittsburgh, Pa., stated, ,.[ was of the opinion that the significance of the wholesaler was diminishing, unless he did some vertical integrating and so forth. I've changed my mind. I am convinced that he doesn't have to do any or all of these things to be an important iink in tJre distribution chain."