MARKETING MYOPIA - Page 4 of 4
But then the days of piss and vinegar were soon over. The Supreme court rulings of 1990s (after the recommendations of Qualitative and Quantative committee constituted for the purpose) placed an embargo on the annual cut in extraction of timber to 80 lakh cfts (in standing terms equal to about 45 lakh cfts in converted terms) from low quality, dry, fallen, dead and deceased stocks only. This was the beginning of the fall of the State monopoly in the timber business. As if it were aimed at shutting shop, the retreat is now turning out to be the virtual exit of the state in the business as the marking handed over for extraction ranges hardly to 25% to 50% of the volume allowed a year by the Supreme Court.
Perhaps due to 'marketing myopia', based on the perception (of profit maximization as goal as against expanding market share) that the scarcity of timber supplies in the niche market (enjoyed by the state historically) will rake in higher earnings, the market was fed with the reduced supplies of timber. The skyrocketed prices fetched led to the fallacy (complacency as well) that the coffers of the state were getting filled up with out felling/selling more. To top it of in absence of the sustained/regular availability of the dry, diseased, snow fallen stuff (as per Supreme Court rulings) for extraction (the marking handed over for extraction during the past five years range hardly to 25% to 50% of the volume allowed a year by the Supreme Court), the consequent lower activity level, coupled with the facto
rs like the higher operational costs incurred on scattered and low outturn stuff, the oligopolistic labour market (where the suppliers--extraction/transportation mates-- tended to be the price setters), market differentiation on the basis of social/political considerations, as also the inability of switching over to mechanization and modern technology added to the cost intensiveness and adversely affected the profitability.
With the timber imports being placed on OGL (open general license) competitors started penetrating the market left unattended and uncatered to by the state. It was not many days before the reduced presence of the state in the market and the unaffordable pricing of its products presented a God given opportunity for them to lure consumers towards their products with all the cost/price and service advantages on earth on their side. In the Head-to-Head competition some win and some lose. The strategic-conquest businessmen, willing to work even for a lower rate of return are successful in using their abilities to force profit maximizing bureaucratic leviathan to drop out of the niche (timber) market for good.
With outmoded technology, bureaucratic decision making and meager capital to fend off the competitors armed with the technology, cost effective systems and professional management we seem to be forced to watch helplessly our business interests crushed under the juggernaut of the imported timber. This is happening at the time when economists talk about internalizing externalities and environmentalists about a world where clean environment is primary and more goods and services secondary.
Perhaps due to 'marketing myopia', based on the perception (of profit maximization as goal as against expanding market share) that the scarcity of timber supplies in the niche market (enjoyed by the state historically) will rake in higher earnings, the market was fed with the reduced supplies of timber. The skyrocketed prices fetched led to the fallacy (complacency as well) that the coffers of the state were getting filled up with out felling/selling more. To top it of in absence of the sustained/regular availability of the dry, diseased, snow fallen stuff (as per Supreme Court rulings) for extraction (the marking handed over for extraction during the past five years range hardly to 25% to 50% of the volume allowed a year by the Supreme Court), the consequent lower activity level, coupled with the facto
With the timber imports being placed on OGL (open general license) competitors started penetrating the market left unattended and uncatered to by the state. It was not many days before the reduced presence of the state in the market and the unaffordable pricing of its products presented a God given opportunity for them to lure consumers towards their products with all the cost/price and service advantages on earth on their side. In the Head-to-Head competition some win and some lose. The strategic-conquest businessmen, willing to work even for a lower rate of return are successful in using their abilities to force profit maximizing bureaucratic leviathan to drop out of the niche (timber) market for good.
With outmoded technology, bureaucratic decision making and meager capital to fend off the competitors armed with the technology, cost effective systems and professional management we seem to be forced to watch helplessly our business interests crushed under the juggernaut of the imported timber. This is happening at the time when economists talk about internalizing externalities and environmentalists about a world where clean environment is primary and more goods and services secondary.
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