James Hardie Industries free essay sample

James Hardie is a leader in the manufacturing and development of technologies, materials and manufacturing processes of durable building materials. For over 20 years, Hardie has operated one of the largest research and development facilities devoted solely to fiber-cement technology. Hardies fiber cement siding has a wood appearance yet does not warp or rot and will pass as a masonry product in cities that have masonry ordinances. (http://en. ikipedia. org/wiki/James_Hardie) In 1989, James Hardie Siding Products launched a line of fiber cement home siding products. The product was guaranteed against rotting or cracking for 50 years and had a warm, textured look that Vinyl Siding could not match. Afterwards, Hardie tried the traditional â€Å"push† approach of selling the product to builders, remodelers, and home improvement centers with advertisement and products demonstrations. However, builders did not like the siding. It was heavy, hard on saw blades, and showed any flaws i n a poor frame job. We will write a custom essay sample on James Hardie Industries or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Meanwhile, there were other fiber cement sidings available so a builder or home improvement center that decided to use or carry the product would frequently buy on price. Nevertheless, James Hardie was developed some research and development. It revealed that people are very emotional about their homes. When one focuses on what building materials provide, such as safety, security, beauty, warmth, and so forth, rather than what they actually care a lot. This led the team to shift from a pure push to more of pull strategy. Advertisement was one of the ways James Hardie builds its product’s image and so on. Magazines such as Southern Living, Sunset and Coastal Living. Another major effort was to put HardiPlank on model homes, in â€Å"dream homes† promoted by the lifestyle magazines, and in builder design centers. While HardiPank had to compete against Vinyl Siding and Wood Based Siding and other fiber cement brands. However, Vinyl considered the strongest competitor, it lasted longer than wood, and builders liked it because it was easy to install, and its always cheaper than James Hardie Siding. However, it did not look or feel like wood. So Hardie built displays that placed Vinyl Siding and HardiPlank side by side and encouraged consumers not only to do a visual comparison but to do a â€Å"tap test†. Using the technical and manufacturing expertise it developed, James Hardie expanded its operations to become a world-leading, specialized, high-technology manufacturer of a wide range of fiber cement building materials. Today, James Hardie is purely a fiber cement business. Its operations span the United States, Australia, New Zealand and the Philippines. They are also establishing a presence in Europe. They employ over 3,000 people who generate revenue of over US$900 million a year. Current Marketing Situation James Hardie James Hardie Industries NV (JHI NV) was created in October 2001, after shareholders voted to accept a unanimous recommendation by the board of James Hardie Industries Limited (JHIL) to restructure the company and establish a new parent company (JHI NV) incorporated. The predecessor to these modern companies was established more than 100 years ago, in 1888, when the enterprising young James Hardie left his familys tannery business in Scotland and immigrated to Australia, in search of new opportunities. Capitalizing on his experience, James started business, importing oils and animal hide tanning products. Andrew Reid, was born on January 24, 1867 in Scotland. He knew James Hardie and maintained contact from Glasgow, where he worked as a Shipping Clerk. Andrew arrived in Melbourne in 1892 and soon after joined James Hardies business, becoming a full partner in 1895. He was outgoing, energetic and visionary and his talents combined well with Hardies sound commercial judgement. James Hardie retired in 1911 and sold his half of the business to Andrew Reid, whose family led the expanding business from 1911 until 1995, when his grandson John B Reid retired. James Hardie Industries Ltd was listed on the Australian Stock Exchange in 1951. In the following years, the company built up a diverse portfolio of building and industrial products businesses. In 1980s, James Hardie pioneered the development of fiber cement technology, and began designing and manufacturing a wide range of fiber cement building products that made use of the benefits that came from the products durability, versatility and strength. Using the technical and manufacturing expertise it developed, James Hardie expanded its operations to become a world-leading, specialized, high-technology manufacturer of a wide range of fiber cement building materials. Today, James Hardie is purely a fiber cement business. Its operations span the United States, Australia, New Zealand and the Philippines. They are also establishing a presence in Europe. They employ over 3,000 people who generate revenue of over US$900 million a year. (http://www. ir. jameshardie. com. au/jh/about_us/history. sp) On the other hand, James Hardie has providing some other products, however, for the most importantly, James Hardie was mainly launched HardiPlank and HardiPanel. These are brand names for fiber cement siding manufactured by James Hardie Building Products. The siding is made from Portland cement mixed with ground sand, cellulose fiber, and other additives. Fiber cement siding can resemble stucco, wood clapboards, or cedar shingles, depending o n how the panels are textured. Fiber cement is more durable than wood or stucco, and is also fire resistant. Although more expensive than Vinyl Siding, fiber cement siding is considerably less expensive than wood. Fiber cement has become popular because it requires little maintenance and can have a natural, wood-like appearance. In the macro environment, the most importantly was the competition. There were other fiber cement sidings available such as, Hardboard, Cedar, Steel/Aluminum and other Fiber-Cement Products. So, a builder or home improvement center that decided to use or carry the product would frequently buy on price. Whereas, the stronger or the threaten competitors were Vinyl siding and Wood siding. However, Vinyl siding was perhaps its strongest competitor, it lasted longer than Wood siding. And its price is always economical than James Hardie Siding. James Hardie used trade, consumer advertising and public relations campaigns to generate demand for its products. These campaigns usually explain the differentiating attributes of fiber cement products and the suitability of James Hardie fiber cement products and systems for specific applications. Despite the fact that distributors are generally its direct customers, they also aim to increase primary demand for their products by marketing the products directly to homeowners, architects and builders. James Hardie company encourage them to specify and install their products because of the quality and craftsmanship of their products. This â€Å"pull† strategy, which means selling to home buyers who would the demand the product from builders and retailers, in turn, assists James Hardie company in expanding sales for their distribution network as distributors benefit from the increasing demand for their products. SWOT Analysis Swot analysis can be defined as Strengths, Weaknesses, Opportunities and Threats. Strengths are attributes of the organization those are helpful to achieving the objective. Instead, Weaknesses are attributes of the organization those are harmful to achieving the objective. And strengths and weaknesses are internal factors. Whereas, Opportunities are external conditions those are helpful to achieving the objective. And threats are harmful to achieving the objective. (http://en. wikipedia. org/wiki/Swot_analysis) Strengths First of all, James Hardie company is a company was established more than 100 years. It shows that this company has their reputation and also reliability for consumers. James Hardie company’s fiber cement board siding or cementitious siding is very durable, especially HardiPlank and HardiPlanel. Insects cant eat it, nor will it burn or rot. Its a mixture of ground sand, clay, and cellulose wood fiber plus water that has been cured using an autoclave. It is cheaper than and can be used in place of redwood and cedar. It is sturdier than wood and has to be painted less often. And it’s better than other competitors as well as other products in the market. For example, James Hardie Siding holds the 85 percentage fiber cement market in United State on2006. They generate revenue of over US$900 million a year. Its proof that why James Hardie Siding maintains the market leader throughout those decades in many countries. Their products are better than others through consumers’ mind. These are the strengths that possessed by James Hardie Siding. Weaknesses Initially, James Hardie was launched a line of fiber cement home siding products. James Hardie tried the â€Å"push† strategy of selling the product to builders, remodelers and home improvement centers. However, builders did not like the siding. It was consider as a weakness of James Hardie, nevertheless, James Hardie was improved it and used â€Å"pull† strategy to sells its products. And succeed eventually. Few years ago, some fiber cement companies being sued by Australian Government, just because many people getting sick of it. Basically, it’s not based of operations. But many consumers were wondered and worried about it. It’s caused the sales of fiber cement decreased at the time. James Hardie Siding was affected by the rumor as well. Opportunities James Hardie is the only siding manufacturer that maintains a research and development center devoted solely to fiber-cement technology. They are continuing to lead the siding industry in innovation. James Hardie is the fastest-growing residential siding manufacturer in North America, with products already on over 3 million homes in the United States and Canada. And this greater number is far away by its competitors. And as their reputation and market experiences, they can expand their business to other countries such as Europe or the Greater China Region. In order to grab more market share. Threats Threats are the external condition those are harmful to achieving the objective. For James Hardie Siding, the main threat perhaps is their competitors. Through the decades, Vinyl Siding and Wood Based Siding playing the competitors role against to James Hardie Siding. However, Vinyl Siding might be the strongest competitor. They do threaten James Hardie Siding’s market possessing and positioning. Indeed, the prices of Vinyl Siding and Wood Based Siding are cheaper than James Hardie Siding. In fact, Vinyl siding is an economical alternative thats growing in popularity around the country for homes of all sizes and styles. And Vinyl siding is backed by the strongest warranty in the industry a non-prorated, transferable Limited Lifetime Warranty. Those are James Hardie competitors’ advantages as well as their limitation. Discussion Questions 1. ) Yes. Hardie’s pull strategy will work. Pull strategy can be defined as – A manufacturing strategy aimed at the end consumer of a product. The product is pulled through the channel by consumer demand initiated by promotional efforts, inventory stocking procedures, etc. Initially, James Hardie tried the traditional â€Å"push† strategy of selling the product to builders, remodelers and home improvement centers. However, builders did not like the siding. It was heavy, was hard on saw blades, and showed any flaws in poor frame job. Afterwards, he decided to a brand image for the siding, which named was named HardiPlank. Meanwhile, he did some research. He found that people are very emotional about their homes. They keen to have a safety, security, beauty, warmth home. So, James Hardie used the â€Å"pull† strategy to sell the product to consumers. And it was successful rather than used â€Å"push† strategy. â€Å"Pull† strategy helps to increase the sales and consumers prefer it. 2. Advertising is one of the ways that James Hardie used to establish the product position for HardiPlank. Market position is the efforts to influence consumer-perception of a brand or product relative to the perception of competing brands or products. Its objective is occupy a clear, unique, and advantageous ‘position’ in the consumer’s mind. Southern Living, Sunset, and Cost al Living are those magazines that James Hardie used to advertise their products. The advertisements emphasized the emotional appeal of houses made with strong, weather-resistant materials. Trade advertisements were used to explain this positioning and emphasized the interest that would be generated on behalf of builders and remodelers. Hardie’s sales force also had to be trained. Historically, they had called on purchasing agents and talked price and delivery schedules. Now they needed to reach the marketing directors of major homebuilders and communicate the value this product and its emerging reputation could provide to their sales programs. 3. ) The learning approach is used to describe the processes by which memory and behavior were changed as a result of conscious and no conscious information processing. Learning was relatively permanent changed in memories and behaviors by acquired new knowledge or from actual experience. There were two types of learning approach such as conditioning and cognitive approach. Culture and social class, through such institutions as schools and religious organization, as well as family, friends, mass media, and advertising, provided learning experiences that greater influenced values, attitudes, tastes, preferences, skills, feelings, meanings and behaviors of a person. James Hardie tried to use advertising to provide learning as teach consumers about Hardiplank. He advertised own product into lifestyle magazines. Therefore, he put Hardiplank on model home, in â€Å"dream homes† promoted by the lifestyle magazines in builder design centers to make a strong emotional appeal of houses to stimuli consumer’s feelings. He used learning conditioning approach of classical conditioning meant a process to establish relationship between a stimulus and responses to bring about the learning of the same response to a different stimulus ways. It could be conditioned stimulus and unconditioned stimulus. 4. An attitude is an enduring organization of motivational, emotional, perceptual, and cognitive processes with respect to some aspect of our environment. It’s a learned predisposition to respond in a consistently favorable or unfavorable manner with respect to a given object. Thus, attitude is the way we think, feel, and act toward some aspect of our environment such as a retail store, television program or product. HardiPlank used adve rtisement to build up its products, and it’s established the product’s image through consumer. Let consumers feels a different attitude for HardiPlank among other competitors. Magazines such as Southern Living, Sunset, and Costal Living are those magazines James Hardie used. The advertisements emphasized the emotional appeal of houses made with strong, weather-resistant materials. Trade advertisements were used to explain this positioning and emphasized the interest that would be generated on behalf of builders and remodelers. 5. ) Except the stronger competitors such as Vinyl Siding and Wood Based Siding, there are still many competitors over the market throughout the world. For example, Hardboard, Cedar, Steel/Aluminum and other Fiber-Cement Products. However, James Hardie has lays out some comparison over these two competitors – Hardboard and Steel/Aluminum. And what I can suggest to James Hardie is they can maintain their products’ quality but they also can lower their price as they can compete to other competitors. Because James Hardie’s products considers the most expensive in the market, however, its products are worthy for the consumers. JAMES HARDIE HARDBOARD Combustibility Non-combustible, creates very little smoke when exposed to flame, eligible for insurance discounts due to non-combustibility Combustibility Burns when exposed to a significant source of heat or flame, not eligible for non-combustibility insurance discounts Aesthetic Performance Maintains original appearance over product lifetime, increases curb appeal and appreciation, consistent beauty from porch to street Aesthetic Performance Frequent painting, caulking and spot repairs required Pests Impervious to termites and other insects Pests Susceptible to damage by termites and other pests Endurance Dimensionally stable, will not rot, warp, buckle, swell or deteriorate even in the harshest climates, maintains original appearance over product lifetime, holds paint up to three times longer than wood, easy to handle and install Endurance Susceptible to rotting, warping, buckling, swelling, shrinking and expanding, is prone to deterioration from exposure, instability causes paint to crack and peel Consumer Perception