AN ANALYSIS OF MARKETING SYSTEM OF MEDIUM DENSITY FIBERBOARD INDUSTRY IN THAILAND

Abstract

The objectives of the study were to study on the production, marketing, market structure, conduct and marketing performance of medium density fiberboard in order to formulate the action plan for forest plantation and marketing of medium density fiberboard in the future. The designed questionnaires were used for gathering the needed data. In this study, there were totally 6 medium density fiberboard mills. The raw materials were used for medium density fiberboard production including eucalyptus logs, rubberwood logs, bagasse, and urea formaldehyde resin. The main production problems were the shortage of raw material in the rainy season; the lack of knowledge about the machines; the lack of skill labor as well as the high investment cost. In 2001, the total amount of effective supply of medium density fiberboard purchase was 452,730 m³, the sources of this including market domestic and exportation of 37.9% and 62.1%, respectively. In addition, the marketing problems were the using rubberwood as raw material caused latex spot, the cost of production of the competitive countries were lower this will causes the smuggling of the products into the country. The market structure was oligopoly and quite rather to be monopoly and the difference among the products is quite less. Thus, each producer attempted to provide the different services for their customers (including before and after selling services). The important barriers for the new comers to entering the market was the quite high overhead costs, the requirement was at least 880 millions baht for a small-scale medium density fiberboard mill. In addition, know-how cost, personnel and the products differentiation caused the market cost of the new comers to be higher. Market conduct, the price policy was agreement among the producers, while the commodity policy emphasized on brand name strategy, selling promotion, and accepts the return of defected goods. In addition, the results of market performance indicated that medium density fiberboard with 3 mm. in thickness having with the highest marketing margin of 7,663.5 baht per m and the lowest pricing efficiency of 160.7 percent, while medium density fiberboard with 19 mm. in thickness having with the lowest marketing margin of 4,186.5 baht per m' and the highest pricing efficiency of 211.2 percent. The technical efficiency indicated that the difference between the ratio of retail price to marketing cost and the ratio of retail price to marketing margin of medium density fiberboard having high value in every thickness levels. Hence, the producers could take opportunity to monopolize their business operation or the marketing system performs inefficiently.