GIVE GREATER ATTENTION TO MARKETING STRATEGY

Pulp & Paper Canada
January 31, 1999
By Pulp & Paper Canada
Pulp and paper producers need to be better marketers, says Stephen Dull, an associate partner at Andersen Consulting in Atlanta, GA. The 1998 study surveyed 90% of North American forest products companies with more than $2-billion (US) in annual sales. This lack of attention to such things as profit-driven market segmentation and strategic price management affect financial results by as much as 40%.

"It's no secret that forest products industry has not kept pace with the profit performance of other industries over the past decade," Dull says. "Yet, we see a handful of pulp and paper companies not only outperforming others, but keeping pace with some of the best US manufacturers."

These companies focused less on selling strategies and more on marketing activities.

Marketing segmentation is the process of dividing broad markets, such as kraft linerboard, into customer groups based on common needs that a company can profitably meet, then developing and executing segment-specific plans for sales, marketing and service. Simply put, this is a move to niche marketing.

Supporting this view is PricewaterhouseCooper's Campbell, who adds that companies need to invest also in business applications like SAP-type technology, to better develop and follow client profiles (See P&PC, December 1998): "Companies have made large investments in process control systems such as DCS and PLC, which focus on the production side. Now is the time to invest in the business side, mainly in sales and marketing."

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