Weyerhaeuser The US forest products industry ... competition from Canada, and two major US firms: Weyerhaeuser and...

The US forest products industry is composed of numerous small producers, substantial
competition from Canada, and two major US firms: Weyerhaeuser and Georgia-Pacific. It is
characterized by largely homogenous unbranded products, periods of substantial industry
oversupply, and high fixed costs.
Weyerhaeuser’s Building Product’s Group had been focusing considerable attention
on the do-it-yourself (DIY) portion of the residential repair and remodel market for lumber.
The repair and remodel market consumes between 25 and 30% of the lumber used in the US,
with rapid growth predicted for the next 10 years. DIYers purchase about half this total, with
contractors buying the balance. The repair and remodel lumber market is also less subject to
fluctuations in the overall economy and interest rates than either the home or industrial
construction markets.
As this market has grown, the distribution channel has changed radically. Large
“home center” and similar chains now dominate distribution of lumber materials to DIYers.
Since most lumber products, particularly dimension lumber (2 X 4s and similar items), are
sold by grade rather than brand name, producers compete primarily on price and secondarily
on delivery and service to the retailer. This allows large buyers to exert strong price
pressures on producers. To counter these price pressures, provide greater value to customers,
and take advantage of superior product quality, Weyerhaeuser was considering expanding its
use of branding beyond the few specialty items currently branded.
In the past, Weyerhaeuser Corporation had run a series of successful general
corporate image campaigns aimed at the general public, stockholders, and public opinion
leaders. A very high-impact aspect of these campaigns focused on Weyerhaeuser’s
reforestation and other environmental activities. Its slogan at that time – “the tree growing
company” – emphasized the company’s strong traditional link to forestry. Broad based
corporate advertising was continuing.
While the general corporate campaigns had been quite successful in reaching their
objective, they did little to increase product awareness among potential buyers, including
DIYers. For Weyerhaeuser to succeed in marketing premium quality products to DIYers, it
was felt that both its general image and its product specific image among this segment would
have to improve. Image was conceptualized to include knowledge about the firm’s offerings
as well as beliefs about quality, value, trustworthiness, and so forth.
In addition, management was very interested in determining the relationship between
a firm’s image and the willingness of its customers to pay a premium for its products.
Finally, management felt it needed more knowledge about the characteristics of DIYers, their
homes, and their projects.
A series of 9 focus groups conducted among DIYers over the previous two years had
provided some tentative insights into consumer’s patterns:
 Most do not understand the lumber grading system and buy based on appearance
 Price is important only for large jobs
 Quality is important but most judge this based on appearance (they look for
straightness, straight grain, few knots, sharp corners, dryness.
 Most desire helpful, skilled retailers but do not believe that many exist
 Most believe you get what you pay for
 Most are not satisfied with the quality of available lumber and do not believe that
grade standards are enforced.
They neither know nor care whose (which producer’s) wood they are buying. They
do not look for brand names.
Most are familiar with Weyerhaeuser and Georgia-Pacific but lack specific
knowledge about either (though they remember Weyerhaeuser’s reforestation ads.)
Secondary data suggested that DIYers (1) are primarily married males although females are
increasingly active (2) range in age from 25 to 44, (3) are both blue-collar and white collar
workers (4) are home-owners (5) earn middle-income salaries, and (6) are geographically
As management was discussing options relating to the DIY market, the sponsorship
of “This Old House” became available. “This Old House” is a very popular program on PBS,
providing advice and instruction on home repair and remodeling. While a firm sponsoring a
PBS program is severely restricted in terms of the type of “commercials” it can show, it is
possible to highlight the sponsor’s name and products related to the DIY market. OwensCorning had sponsored the show for several years.
Weyerhaeuser opted to sponsor the show with the objective of improving the
company’s image among viewers. Before its first season as sponsor, the company decided to
develop a means of determining the effectiveness of the sponsorship. It also desired to
determine (1) the impact the show had on Owens-Corning’s image, (2) the relationship
between corporate image and price sensitivity, and (3) the characteristics of DIYers.
From Tull, D. S. and Del I. Hawkins 1990. Marketing Research: Measurement & Method (5 th
edn.) New York: Macmillan
1. What marketing mix elements discussed in the case history led Weyerhaeuser to act.
2. What industry and economic background information is relevant in this case?
3. What were the events that led Weyerhaeuser to decide to act?
4. What courses of action were open to Weyerhaeuser?
5. What criteria will be used to evaluate these alternatives?
6. How important is the information gained from the focus group studies in formulating
the marketing decision.
7. What is the management decision problem facing Weyerhaeuser?
8. What information does Weyerhaeuser need to make a decision?
9. What was Weyerhaeuser marketing research problem?
10. What are some research questions that could be asked and what hypotheses could you
11. What might be some of the components of the Research Approach?