- Personal Background
- Long time family ties to Abbeville, Alabama
- AU undergraduate in Marketing as an interim step to a law degree
- Began law career in Birmingham
- Unforeseen circumstance required return to Abbeville
- Established a home town law practice and "sold a little lumber on the side"
- Lumber business initially a money losing venture "Lost $19000 on $22000 worth of sales the first year"
- First twelve years, the lumber business was run as a sideline out of "a one room law office"
- In 1983, Jimmy was "invited" to apply to Harvard Executive program for young entrepreneurs
- While at Harvard Jimmy learns about differentiating a commodity
- As a homogeneous product, lumber is/was sold to the channel on price, price, price
- In 1984, Frank Purdue presents a case study to Jimmy's class on the retail market for fresh chicken
- Historically chicken was viewed by both producers and resellers as a homogeneous commodity
- In late 1960's Purdue began to focus on the consumer and identified those attributes that were salient to selected target markets
- "Jewish Mothers" in NYC exhibited a high degree of selectivity in picking a freash chicken
- Fragrance, color, firmness were all attributes used to evaluate the "freshness" of the chicken
- This wasn't surprising, but what it indicated to Purdue was that customers didn't necessarily agree that all chickens were equal (ie, homogeneous)
- Purdue then "zeros in" on making chicken "special"
- The similarity between the case for branding chickens and the problems Jimmy saw in the lumber market were too great to be ignored
- Jimmy lays out his idea to differentiate treated lumber and attempt "an end-run" by focusing advertising to ultimate consumers (a Pull Promotional Strategy) to his professor/advisor and is told that it will never work
- Great Southern Wood's Success
- GSW sales for 1995 were $180 million
- GSW remains a family owned business that contributes to the well being of the citizens of Abbeville and the state of Alabama
- Owership/management of GSW provides fun and challenge sufficient enough to negate ideas of "cashing out"
- Operations allow 2-3% return on sales - For a commodity, "...if I can do this, I'm a hero"
- Jimmy attributes his success to "Luck and Stupidity" with an obvious appreciation for the market strategy that he learned at Harvard and the availability of developmental financing that was made available via government programs
- GSW's basic marketing program - "Effecting choice at the margin...being the last voice heard"
- Primary target market consists of men, ages 25-54 years old
- Most salient attribute - Clean, straight and backed-up by a life-time guarantee
- Unifying vehicle - the Osmose Brand
- Promotional media/theme - TV ads featuring humor, color and sports celebrities
- Jimmy sought spokespersons that would evoke passion and a positive carryover of loyalty
- Re-enforced message - "If it doesn't say Osmose on the yellow label believe me you don't want it"
- To establish the required recognition, passion, loyalty and believability, Jimmy selected SEC football coaches
- Within GSW's area of coverage, and for the expressed target audience "...SEC football is a passion"
- Facilitating Factors and Other Interesting Occurances
- Substantial restructuring within the treated lumber business
- Historically lumber treaters were "...as numerous as gas stations"
- Mom and Pops who capitalized on cheap labor and spatial proximity to resources (pine trees) and markets
- Demand, value added by preservatives and low costs allowed reasonably high margins
- Low entry cost - all you needed was a cylinder, a truck and some chemicals
- EPA reviews led to legislation prohibiting dumping any perserving materials into the environment
- Deep pocket litigations and the inability of the "corporate veil" to shelter polluters (or their heirs)
- These pressures caused tremendous consolidation within the industry as marginal producers dropped out
- Growths in market shares resulted more from consolidation than actual market expansion (a zero-sum game)
- Increases in cost with increases in size (and geographic coverage) along with price pressures by "power retailers" caused margins to shrink
- Responding primarily to the environmental threat, GSW goes indoors
- Rather than leaving treated lumber exposed on the yard (where potential ground water contamination could occur) GSW began building huge covered warehouses
- The ability to protect finished goods lead to opportunities to expand product lines into complementary products such as spindles, rails and even recycled plastic building products
- GSW's Expansionary Philosophy - Wait and see what opportunities present themselves
- Planned opening of new plant (GSW's fifth) near Mussel Shoals to serve Memphsis area
- Market research on comparative brand awareness between Memphis and Montgomery
- Indicates what has been accomplished and what is yet to be done
- Miscellaneous
- The role and power of advertising - the engine that pulls the train
- Relative marketing budgets for commodities - 1% of sales
- Value of GSW's advertising to SEC coaches and to their recruiting effort
- Thirteen entertaining 30 second TV spots
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