University of Wisconsin Center for Cooperatives

Wood Products Cooperatives: Overview and Exploratory Analysis

Steven R. Shook*
Yun Zhang*
Francis G. Wagner*


ABSTRACT

In the United States, nearly any business organization can be legally structured as a cooperative, whereby individuals cooperatively work together to achieve common goals. The past decade has seen a growing interest in cooperative wood products organizations in response to the rise in market uncertainties in many timber-based communities. Information concerning cooperative business organizations in the wood products industry, however, is scant. This paper provides an overview of the general classification of cooperative businesses, as well as a brief review of forestry and wood products cooperatives in the United States. Survey results collected from consumers, cooperative members, and cooperative consignees of a single wood products cooperative located in Idaho are also reported in this paper. Results from the survey suggest that although consumers of cooperative products believe that product quality between conventional and cooperative retail outlets is perceived as being similar, the consumers are more likely to purchase cooperative products at slightly higher prices in order to assist in building their community. Consumers indicated that they were satisfied with nearly all of the cooperative's products and services. Despite the nature of the differences in their participation in the cooperative, co- operative members and cooperative consignees were found to have somewhat similar perceptions of the cooperative's functions and policies. Future research on wood product cooperatives is suggested to examine whether structural differences influence consumer, cooperative member, and cooperative consignee perceptions.


The act of individuals cooperatively working together to achieve a common goal is a practice that has existed for centuries. The combined impact of open economies and the arrival of less competent and more volatile labor markets sparked the initial cooperative movements in the business world (1). Typically, the individuals who work together in a cooperative business enterprise perceive that it would be extremely difficult to achieve certain economic goals by working alone. Joining others who have common objectives can lead a single cooperative member to achieve her/his personal business goals, while concurrently achieving the goals of others. For decades, cooperatives in market economies have emerged where market deficiencies, imperfect competition, excessive concentrations of power, and un-met needs exist. Cooperatives have also tended to emerge where the costs of adjustment to economic change have threatened to damage communities, allowing local individuals greater power to control the pace and the direction of change in order to preserve what they value (9).

CLASSIFICATION OF COOPERATIVES

Cooperatives can be classified according to a number of criteria, including groups or areas served, functions performed, legal status, and financial structure. In reality, however, these standards do not unambiguously classify cooperatives since a cooperative may belong to several classifications simultaneously.

Depending on the economic group that a cooperative is serving, it can be classified into one of three distinct categories: 1) producer-marketing cooperative; 2) consumer cooperative; or 3) worker cooperative. One of the most prevalent types of producer-marketing cooperatives in the United States is an agricultural cooperative, which is operated by farmers to produce and market many types of crops, livestock, and live- stock products. This type of cooperative also provides a substantial amount of the farm supplies and business services that farms require in the process of agricultural production. Diamond Walnut Growers, Sun-Maid Growers of California, and Western Dairymen Cooperative are examples of large producer-marketing cooperatives in the United States. Alternative forms of producer-marketing cooperatives are those that manufacture and market goods that require a certain level of craftsmanship. These producer-marketing cooperatives usually develop in response to the needs of entrepreneurs and generally appear in retail business, light industry, and service industries (1).

Individuals who are members of consumer cooperatives utilize their membership to obtain high-quality products or services at favorable prices. Examples of consumer cooperatives include Recreational Equipment Incorporated (REI), numerous electric power cooperatives, as well as fuelwood cooperatives located in the northeastern regions of the United States (11). Worker cooperatives are associations organized by workers to pursue any of a large number of occupational interests related to the production of goods and services. Individuals in worker cooperatives may run industrial business ventures, such as plywood manufacturing plants, or they may join forces to operate farms (5,10).

The area that a cooperative serves can also be used as a classification scheme. Four types of cooperatives may be identified by location: local, regional, national, and international. The basis for cooperative classification based on area served is not transparent; it often indirectly reflects a mixture of the size of business operations and the various functions that a cooperative performs (1).

Legally, cooperatives may be classified as incorporated or unincorporated regardless of size, areas and groups served, and types of membership. Cooperatives can also be classified according to their financial structure as stock and nonstock cooperatives. In stock cooperatives, as the name suggests, equity in the cooperative is represented by owner- ship of shares of common and/or preferred stock by stockholders who are owners. Conversely, ownership in non- stock cooperatives is represented by membership certificates, which usually provide evidence that a payment has been made toward a membership fee.

Finally, some business enterprises are a hybrid mixture of cooperative business and true private business ventures. Such businesses exist either because of institutional limitations, such as lack of adequate legislation, or because of the special interests of members. Examples of these hybrid businesses abound, including investment mutual funds, condominiums, consumer rebate plans, discount bargaining organizations, and various health plans (1).

COOPERATIVES IN FORESTRY AND WOOD PRODUCTS

It is estimated that approximately 20 to 30 percent of all commercially available timberland in the United States is owned through agricultural operations (6). Much of this timberland is centered in the Midwest and Eastern regions of the country. In 1937, Congress passed the Co-operative Farm Forestry Act, which was aimed at stimulating cooperative forestry operations among fragmented timberland ownerships in the agriculture industry. By 1943, 15 forestry cooperatives were formed under the congressional act. These cooperatives generally employed a professional forester who marketed timber on a com- mission basis for members. These cooperatives also ventured into ancillary markets such as Christmas trees, maple syrup, and internal production of lumber. Despite the availability of credits, grants, and free or subsidized expert ad- vice, the development of forestry cooperatives within the agriculture industry has never successfully materialized in the United States (11,12). Impediments to forestry cooperative success in the United States include the relative small timberland holdings among farm operations, difficulties arising in business co- ordination due to timberland crops being harvested on longer rotations than other agricultural crops, the fragmented markets for timber, and the lack of managerial knowledge among cooperative members regarding timberland operations (6).

In sharp contrast to the United States, cooperatively managed timberlands are entrenched in Japan, where, in 1991, 1,651 forestry cooperatives with approximately 1.8 million members were managing 46 percent of Japan's timber- land area, representing approximately 28.8 million acres (7). Although Japan's forestry cooperatives are similar in structure to those in the United States, the government of Japan has been significantly more proactive in enhancing the growth and development of Japanese forestry cooperatives, passing several national laws over the course of the 2Oth century (6).

The development of cooperatives in wood products in the United States has also met with limited success. One success, however, has been the worker co- operatives in the plywood industry of the Pacific Northwest. The first ply- wood cooperative was organized as the Olympia Veneer Company in 1921 (4). By 1950, nearly one-quarter of all U.S. plywood production was produced by worker cooperatives. However, the shift of plywood production to the South and the introduction of oriented strandboard triggered a general decline of the ply- wood industry in the Pacific Northwest, therefore reducing the relative importance of worker cooperatives in the plywood industry today (1,4).

Many small wood products producers today are faced with similar economic needs as those farmers who organized cooperatives in agriculture. Like farmers, these wood products producers lack market power, such as the ability to exert some unilateral control over supply and prices, and have difficulty in independently financing ventures; they perceive cooperatives as being a business form that can help them achieve jointly what they could not do independently (9). It was reported in 1995 that several specialty production and woodworking co- operatives were scattered from coast to coast (8). The essential function of these cooperatives rests in the marketing of products manufactured by both members and consignees in a more efficient and effective manner. As an example, Northwest Woodworking, a woodworker's cooperative founded in Seattle, Wash., in 1980, is dedicated to the marketing of handcrafted furniture manufactured by its 28 members and hundreds of consignees (http://www.nwfinewoodworking.com). Another similar cooperative is Artwood in Bellingham, Wash., which is operated by 12 woodworking members to promote the sale of crafts and furniture produced by the members and 70 consignees (http://www.pacificws.com/artwood/). The scale of a wood products cooperative can vary tremendously. For instance, the average monthly sales revenue generated by the previously two mentioned cooperatives in Washington State ranged from $10,000 to $100,000 in the late 1990s.

OBJECTIVES

Despite their existence in the marketplace, no research has been conducted to assess the internal (i.e., members and consignees) and external (i.e., consumer) perspectives of a wood products cooperative. The objective of this exploratory study was to provide a characterization of a specific wood products marketing cooperative. This characterization includes an assessment of cooperative members, cooperative consignees, and consumers of cooperative wood products. A secondary objective of this study was to evaluate the managerial characteristics of a wood products marketing cooperative. In particular, how do the managerial aspects of the cooperative affect the cooperative's image and performance? Some pertinent research questions to be answered in this study included:

A mixed case method and survey method approach was used to gather and report information contained in this study. Typical case studies describe the conditions and circumstances facing an organization at a particular point in time. This description often includes information regarding the organization's goals and objectives, its financial condition, the attitudes and beliefs of managers and other employees, market conditions, competitors' activities, and various environmental forces that may impact the organization's present or proposed marketing strategy. Case study information, combined with survey data gathered from cooperative customers, members, and consignees, allowed us to reliably provide answers to our specific research questions.

BACKGROUND OF CASE STUDY WOOD PRODUCTS COOPERATIVE

The wood products cooperative evaluated in this study was the ForestCraft Marketing Cooperative (FCMC), which is a for-profit business venture, incorporated in the state of Idaho on November 24, 1998 (http://www.forestcraft.com/). A primary goal of this cooperative is to encourage local and regional economic development through the marketing of products from forests and other natural resources. At the time of this study, the cooperative consisted of 19 members and 97 consignees located in four states (Idaho, Washington, Montana, and Oregon). These individuals sold their products at a retail outlet called Wood Memories and Gifts (WMG), located in Moscow, Idaho, and on the Internet.

Membership in FCMC requires the acquisition of at least one share of the cooperative business, although an individual has the option of purchasing additional shares. The purchase of a cooperative business share is not a requirement to become a FCMC consignee. FCMC members pay a commission fee using a sliding scale that is based on total gross sales revenue generated over a set period of time. The highest commission rote paid by FCMC members is 35 percent. FCMC consignees pay a flat commission fee, which is 40 percent of gross sales revenue. FCMC members have the additional benefit of listing their products on the FCMC website, whereas FCMC consignees are not offered this option.

In addition to incubating small businesses to help them grow, the WMG retail outlet offers an opportunity for retirees, hobbyists, homemakers, teenagers, and disabled individuals to supplement their income. FCMC also focuses on environmental sensitivity, emphasizing the use of woods logged by horses, salvaged from dismantled structures, or obtained from logging "leftovers," including burls, crotch wood, and timber considered too small for commercial sawmills. FCMC encourages the utilization of backyard and community hard- woods that would otherwise be used for firewood or hauled to a waste facility. FCMC is also working with Sustainable Northwest of Portland, Oreg., to certify member and consignee products with their ForestRestoreTM and WasteKnotTM trademarks (http://www.sustainable-northwest.org).

SURVEY DESIGN AND METHODOLOGY

Three preliminary mail surveys were developed through exploratory interviews and information collected from various cooperative retailers. One survey focused on consumers of WMG products, while the remaining two surveys focused on FCMC members and consignees, respectively. Six industry experts completed pretests of each of the preliminary survey instruments. These pretests were conducted to assess each survey's comprehensiveness, clarity, and ease of use. Three separate two- page survey instruments were developed and finalized based upon pretest participants' comments and suggestions.

Simple random sampling was used to construct the consumer survey sample mailing list. A sample size of 219 consumers was deemed appropriate for this study based on Cochran's sample size recommendations and calculation methodology (3). A random number generator was employed to select 219 consumers from an FCMC database containing 860 individuals who had either been past consumers of WMG products or had indicated an interest in WMG products while visiting the retail outlet. For the remaining two surveys, a census was made of FCMC members and consignees.

Each of the three survey instruments was mailed during late October of 1999. Each mailing consisted of a cover letter, a survey instrument, and a pre-addressed postage-paid return envelope. The cover letter explained that the survey was aimed at collecting information concerning perceptions of FCMC and WMG services, products, and policies. The cover letter also informed participants that their survey responses would be kept strictly confidential. Each of the three survey instruments also contained a brief message that defined the function and operation of cooperative retail out- lets, as well as a brief description of the WMG retail outlet.

Consumers returned a total of 63 completed and usable survey instruments, FCMC consignees returned 34 survey instruments, and 12 survey instruments were returned by FCMC members. Two survey mailings were undeliverable, one from the consumer group and the other from the FCMC consignee group. As such, the effective response rates for the consumer, FCMC consignee, and FCMC member surveys were 28.9, 35.4, and 63.2 percent, respectively.

Nonresponse bias was assessed for each of the three surveys utilizing a two-tailed t-test (0.05 a-level) that compared the responses of early respondents to late respondents across numerous survey questions. Assessments of the statistical results indicated that no significant differences existed between early and late respondents for each of the three surveys. The Armstrong and Overton method was also used to assess non- response bias; resulting in similar results to the t-test method (2). Combined, the t-test and Armstrong and Overton methods suggested that nonresponse bias was not significantly affecting the results obtained in any of the three separate surveys.

RESULTS AND DISCUSSION DEMOGRAPHIC PROFILE OF SURVEY RESPONDENTS

Demographic data of cooperative member, cooperative consignee, and co-operative consumer respondents are shown in Table 1. Slightly more than 98 percent of the individuals who participated in the cooperative consumer survey responded to questions regarding gender and age. The survey data revealed that the majority of responding consumers were female (71.4%), which coincides with the gender skew contained in both the survey mailing list and the FCMC consumer database. More than three-quarters of the responding consumers were between the ages of 31 and 65 years. Over one-third of the consumer respondents indicated that they had annual household income within the range of $30,001 to $60,000, while nearly another one-third reported annual household income greater than $60,000. Nearly 70 percent of the consumer respondents were either employed or self-employed. Consumer respondents where found to be highly educated, with more than 40 percent indicating that they possessed a college degree. Another one-third of consumer respondents had taken college coursework.


Table 1. - Demographic profile of survey respondents. aTotal number of survey respondents was 109 (cooperative members: 12; cooperative consignees: 34; and cooperative consumers: 63).
FCMC members FCMC consignees WMG consumers
----------(% of survey respondents)a----------
Gender Female 41.7 39.4 71.4
Male 58.3 60.6 27.0
No response ---- ---- 1.6
Age <=20 ---- 3.0 1.6
21 to 30 ---- 3.0 11.1
31 to 45 25.0 27.3 34.9
46 to 65 66.7 45.5 34.9
>65 8.3 21.2 9.5
>No response ---- ---- 1.6
Annual household income <=$15,000 16.7 12.1 4.8
$15,001 to $30,000 25.0 21.2 28.6
$30,001 to $60,000 16.7 48.5 36.5
$60,001 to $100,000 33.3 6.1 17.3
>$100,000 8.3 3.0 3.3
No response ---- 9.1 9.5
Employment status Employed 25.0 24.2 57.1
Self-employed 58.3 39.4 12.7
Unemployed ---- 9.2 4.8
Full-time homemaker ---- 3.0 9.5
>Retired 16.7 24.2 12.7
No response ---- ---- 3.2
Education level No formal education ---- ---- 3.2
Some high school ---- 9.1 3.2
High school graduate 16.7 24.2 12.6
Some college education 41.7 21.2 36.5
College graduate ---- 15.2 22.2
Some graduate education 8.3 3.0 3.2
Graduate degree 33.3 27.3 15.9
No response ---- ---- 3.2

All cooperative member and consignee respondents replied to questions regarding gender and age. Males represented approximately 60 percent of both member and consignee survey respondents. None of the cooperative member respondents and few consignee respondents (6%) indicated that they were younger than 31 years of age. Most cooperative members and consignees indicated that they were between the ages of 46 and 65. Only 8.3 percent of cooperative members were older than 65 years. In contrast, 21.1 percent of cooperative consignees were older than 65.

Generally, cooperative members tended to report higher levels of annual household income relative to cooperative consignees. However, 17 percent of cooperative members indicated that they had annual household income less than $15,000. One-third of cooperative members had annual household income in the range of $60,001 to $100,000. One-third of cooperative consignees reported annual household income below $30,000, and one-half reported annual household income in the range of $30,001 to $60,000.

Both cooperative member and consignee respondents indicated that self-employment was their primary employment status, with 58.3 and 39.4 percent of cooperative members and cooperative consignees being self-employed, respectively. Approximately one-fourth of all cooperative consignee respondents indicated that they were retired. This result, coupled with age demographics of the consignees, suggests that a sizeable number of cooperative consignees utilize FCMC as a means to supplement their income.


One-third of cooperative members reported that they had graduate degrees compared to 27.3 percent of cooperative consignees. Generally, both cooperative member and cooperative consignee respondents were highly educated, with only 16.7 percent of members and 33.3 percent of consignees indicating that their highest level of education attained was high school or less.

CONSUMER SURVEY RESULTS

Participants of the consumer survey were asked to indicate the degree of importance that they placed on 21 retail outlet attributes when making a purchase at the WMG retail outlet (Table 2). The degree of importance was measured using a Likert-like ordinal scale that ranged from 1 (not important at all) to 7 (extremely important) and possessed a neutral value of 4 (neither important nor unimportant). Collectively, respondents indicated that the most important retail outlet attributes were workmanship of products, quality of products being offered, price of products, style of products, and salesperson's courtesy. The least important retail outlet attributes were ability to purchase on lay-away, exterior appearance of store, payment methods available, written description of products, and convenience of store hours. Each attribute's mean importance rating was tested to determine if it was statistically greater than the neutral response of 4; results indicated that all of the consumers' mean attribute importance ratings were significantly greater than the neutral response of 4.

Table 2. - Consumer importance and satisfaction ratings of WMG retail outlet attributes. aConsumer satisfaction participants were asked the following question: "Please indicate the degree of importance that each of the following attributes has to you if you were to make a purchase at Wooden Memories and Gifts." The survey participant importance rating was measured utilizing a Likert-like scale ranging from 1 (not important at all) to 7 (extremely important) and containing a neutral value of 4 (neither important or unimportant).
bConsumer survey participants were asked the following question: "Please indicate your level of satisfaction with each of the following attributes regarding Wooden Memories and Gifts." Survey participant satisfaction was measured utilizing a Likert-like scale ranging from 1 (not satisfied at all) to 7 (extremely satisfied) and containing a neutral value of 4 (neither satisfied nor unsatisfied).
Importance ratings Satisfaction ratings Difference between mean importance and satisfaction ratings
Attributes Meana Standard deviation Meanb Standard deviation
Workmanship of products 6.57 0.62 5.88 1.34 0.69
Quality of products being offered 6.40 0.72 6.08 1.21 0.32
Price of products 6.25 0.82 4.68 1.75 1.57
Style of products 6.22 0.83 5.79 1.40 0.43
Salesperson's courtesy 6.20 1.01 5.97 1.33 0.23
Uniqueness of products 6.08 1.17 6.24 1.21 -0.16
Salesperson's helpfulness 6.00 1.04 5.91 1.29 0.09
Ability to special order products 5.98 1.35 ---- ---- ----
Variety of products for sale 5.93 1.04 5.80 1.34 0.13
Availability of products 5.92 1.21 5.64 1.47 0.28
Promptness of service 5.90 0.96 5.65 1.62 0.25
Items can be returned for refund 5.80 1.41 ---- ---- ----
Knowledge level of sales staff 5.75 1.04 5.77 1.31 -0.02
Store's product return policy 5.53 1.30 5.06 1.32 0.47
Location of store in Moscow, Idaho 5.37 1.43 6.02 1.27 -0.65
Interior appearance of store 5.32 1.37 6.12 1.24 -0.80
Convenience of store hours 5.20 1.42 5.59 1.19 -0.39
Description of products (written) 5.00 1.48 5.18 1.40 -0.18
Payment methods available 4.95 1.45 5.43 1.27 -0.48
Exterior appearance of store 4.87 1.56 5.81 1.29 -0.94
4.76 1.77 ---- ---- ---- ----

Consumer survey participants were also asked to indicate their degree of satisfaction with 18 retail outlet attributes as they pertained to the WMG retail outlet (Table 2). These 18 attributes were identical to 18 of the 21 attributes for the importance scale. Satisfaction was measured using a Likert-like scale that ranged from 1 (not satisfied at all) to 7 (extremely satisfied) and possessed a neutral value of 4 (neither satisfied nor unsatisfied). As a group, consumers were found to be most satisfied with the uniqueness of products, interior appearance of the store, quality of the products offered, location of the store, and sales- person's courtesy. WMG retail outlet at- tributes that rated lowest with regard to consumer satisfaction included price of products, store's product return policy, written description of products, payment methods available, and convenience of store hours. Similar to the at- tribute importance ratings, all mean attribute satisfaction ratings were tested to determine if they differed significantly from a neutral response of 4. Results revealed that all of the consumers , mean attribute satisfaction ratings were significantly greater than the neutral response of 4.

It was assumed in this study that WMG better meets consumer expectations on a particular attribute when the difference between an attribute's importance and satisfaction rating becomes smaller (i.e., gap analysis). It was also assumed that when the mean satisfaction rating exceeded the mean importance rating for a particular attribute that WMG was, at a minimum, meeting or exceeding consumer expectations regarding the particular attribute. Given this analytical framework, survey results indicated that WMG met or exceeded consumers' expectations on eight separate attributes (Table 2). WMG was found to be clearly exceeding consumer expectations regarding the attributes of exterior appearance of store, interior appearance of store, location of store in Moscow, Idaho, and payment methods available. Survey results revealed that a fairly large difference between importance and satisfaction ratings existed for the price of products and workmanship, which suggests that WMG consumers are price sensitive given the current workmanship of products.

Consumer survey participants" were also asked the degree to which they agreed with four different statements regarding conventional and cooperative retail outlets (Table 3). Respondents replied to these four questions using a Likert-Like scale that ranged from 1 (strongly disagree) to 7 (strongly agree) and contained a neutral midpoint of 4 (neither agree nor disagree). Consumers indicated that they strongly agreed with the statement that purchasing products from a cooperative retail store helped build their community more than purchasing from a regular retail store. Given a choice, consumers agreed that they would be more likely to purchase a product from WMG than from a regular retail store. Consumers also agreed with the statement that they would be willing to pay slightly more for products sold through a cooperative retail store. Finally, consumers indicated that they neither agreed nor disagreed that the quality of WMG products were the same as similar products sold from a regular retail store. Collectively, these results suggest that although product quality between conventional and cooperative retail outlets was perceived by consumers as being similar, consumers were more likely to purchase cooperative products at slightly higher prices in order to assist in building their community.

Table 3. - The degree that consumers agree with the following statements that compare conventional retail outlets with cooperative retail outlets. aConsumer satisfaction participants were asked the following question: "Given the definition of cooperative retail stores at the beginning of this survey and your knowledge of Wooden Memories and Gifts, please indicate the extent to which you agree with the following statements." Survey participant agreement was measured utilizing a Likert-like scale ranging from 1 (strongly disagree) to 7 (strongly agree) and containing a neutral value of 4 (neither agree nor disagree).
b*Indicates that the mean is not significantly different from a neutral mean response of 4 (two-tailed one-sample t-test; 0.05 a-level; p<=0.05).
Statements regarding conventional and cooperative retail outlets Agreement rating meana Standard deviation
Purchasing products from a cooperative retail store helps build my community more than purchasing from a regular retail store 6.14 0.97
Given a choice, I would be more likely to purchase a product from Wooden Memories and Gifts than from a regular retail store 5.59 1.34
I am willing to pay slightly more for products sold through a cooperative retail store 5.25 1.52
I believe that the quality of Wooden Memories and Gifts' products is the same as similar products sold from a regular retail store 3.74b* 2.12

COOPERATIVE MEMBER AND CONSIGNEE RESULTS

Cooperative member and consignee survey participants were asked to evaluate the importance of nine separate services provided by FCMC. Respondents were asked to rate the importance of FCMC services utilizing a Likert-Iike scale ranging from 1 (not important at all) to 7 (extremely important). The scale also contained a neutral response of 4 (neither important nor unimportant). As the survey results indicate, both cooperative members and consignees perceived all nine FCMC services as being important; the mean for each FCMC service was found to be significantly different from the neutral response of 4 for both cooperative members and consignees (Table 4).

Given the nine FCMC services assessed in the survey, cooperative members indicated that accurately taking orders, providing accounting information, and providing a distribution outlet were the three most important services pro- vided by FCMC, whereas cooperative consignees indicated that promoting their products, knowledge of sales staff, and assuring variety in the store were the three most important services to them (Table 4). Nonetheless, the mean importance rating for eight of the nine surveyed FCMC services were found to be statistically identical between cooperative members and consignees. The FCMC service of providing accounting information, however, was found to be significantly more important to cooperative members than to consignees.

Table 4. - Cooperative member and consignee importance ratings for various services provided by FCMC. aCooperative member and consignee survey participants were asked the following question: "Please indicate how important each of the following services are to you as a ForestCraft Marketing Cooperative member/consignee." Survey participant satisfaction was measured utilizing a Likert-like scale ranging from 1 (not important at all) to 7 (extremely important) and containing a neutral value of 4 (neither important nor unimportant).
b*Indicates that a statistically significant difference exists between the mean importance rating reported for cooperative members and cooperative consignees (two-tailed one-sample t-test; 0.05 a-level; p<=0.05).
Cooperative service Importance ratings of FCMC members Importance ratings of FCMC consignees
Mean a Standard deviation Mean Standard deviation
Accurately taking special orders 6.27 1.10 5.74 1.09
Providing accounting information 6.18b* 0.98 5.44* 1.08
Providing a distribution outlet 6.09 0.94 5.78 1.29
Knowledge level of sales staff 5.91 1.04 6.00 1.10
Assuring quality of products 5.64 1.03 5.71 1.32
Promoting your product 5.45 1.51 6.31 0.82
Assuring variety in stores 5.36 1.21 5.81 1.08
Maintaining convenient hours 5.36 1.69 5.56 1.05
Providing for product returns 5.20 1.32 5.19 1.17

Utilizing a Likert-like scale, which ranged from 1 (not satisfied at all) to 7 (extremely satisfied) and contained a neutral response of 4 (neither satisfied nor unsatisfied), cooperative member and consignee survey participants were asked to rate their level of satisfaction with 12 FCMC services (Table 5). Co-operative members were found to be satisfied with 7 of the 12 services and neither satisfied nor unsatisfied with the remaining 5 services. Cooperative members were found to be most satisfied with the FCMC services of assuring variety in stores, accurately taking special orders, maintaining convenient hours, and distribution of revenues. Co- operative consignees were found to be satisfied with a greater number of FCMC services. Specifically, consignees were found to be satisfied with 10 of the 12 FCMC services, and neither satisfied nor unsatisfied with the FCMC services of commission charged by FCMC and promotion of their products. Two statistically significant differences were uncovered in the satisfaction rating data between cooperative members and consignees. First, cooperative members were significantly more satisfied with FCMC's ability to accurately take special orders. Second, cooperative members were found to be significantly more satisfied with FCMC's ability to provide for product returns.

Table 5. - Cooperative member and consignee satisfaction ratings for various services provided by FCMC aCooperative member and consignee survey participants were asked the following question: "Please indicate how satisfied you are with each of the following services that ForestCraft Marketing Cooperative provides to you as a member/consignee." Survey participant satisfaction was measured utilizing a Likert-like scale ranging from 1 (not satisfied at all) to 7 (extremely satisfied) and containing a neutral value of 4 (neither important nor unimportant).
b*Indicates that a statistically significant difference exists between the mean satisfaction rating reported for cooperative members and cooperative consignees (two-tailed one-sample t-test; 0.05 a-level; p<=0.05).
c**Indicates that the mean is not significantly different from a neutral mean response of 4 (two-tailed one-sample t-test; 0.05 a-level; p<=0.05).
Cooperative service Satisfaction ratings of FCMC members Satisfaction ratings of FCMC consignees
Mean a Standard deviation Mean Standard deviation
Assuring variety in stores 6.00 0.89 5.33 1.30
Accurately taking special orders 5.82b* 0.98 4.80* 1.45
Maintaining convenient hours 5.73 1.10 5.28 1.17
Distribution of revenues 5.73 1.01 5.16 1.19
Providing a distribution outlet 5.55 1.29 4.75 1.67
Providing accounting information 5.27c** 2.05 4.94 1.13
Providing for product returns 5.00* 1.15 4.37* 0.63
Commission charged by ForestCraft 5.00** 1.56 4.34** 1.72
Display of your products at retail outlet 4.91** 1.64 5.38 1.48
Assuring quality of products 5.00** 1.33 4.97 1.47
Providing pricing assistance 4.80 0.92 4.84 1.53
Promoting your product 4.27** 1.49 4.50** 1.52

Similar to the consumer survey, cooperative members and consignees were asked to indicate the degree to which they agreed with several statements regarding FCMC and the WMG retail outlet (Table 6). Responses were used to assess how cooperative members and consignees perceived FCMC's current business operations and performance, as well as its future existence. The cooperative member and consignee survey participants utilized a Likert-Like scale ranging from I (do not agree at all) to 7 (highly agree) and containing a neutral response of 4 (neither agree nor disagree) to respond to nine separate statements. The nine statements were presented identically in the cooperative member and consignee surveys. Two- tailed one-sample t-tests were used to test whether the mean responses for each statement were significantly different from a neutral response of 4. In addition, two-tailed independent t-tests were also conducted across each of the nine statements to determine whether significant, marginally significant, or insignificant differences existed between cooperative members' and consignees' mean agreement ratings. Collectively, cooperative members agreed with three of the statements, while neither agreeing nor disagreeing with the remaining six statements. Cooperative members indicated that they agreed with the statements: consignee products enhance sales of my own product(s), products at WMG are displayed well, and member fees are reasonable.

Cooperative consignees agreed with seven of the nine statements. Cooperative consignees neither agreed nor disagreed with the two statements referring to fees and commissions: member fees are reason- able and consignee commission rates are reasonable.

Table 6. - The degree to which cooperative members and consignees agree with the following statements regarding FCMC aCooperative member and consignee survey participants were asked the following question: "Please indicate below your level of agreement with the following statements." Survey participant satisfaction was measured utilizing a Likert-like scale ranging from 1 (do not agree at all) to 7 (highly agree) and containing a neutral value of 4 (neither agree nor disagree).
b*Indicates that a marginally statistically significant difference exists between the mean satisfaction rating reported for cooperative members and cooperative consignees (two-tailed independent t-test; 0.05 a-level; p<=0.05).
c**Indicates that a statistically significant difference exists between the mean satisfaction rating reported for cooperative members and cooperative consignees (two-tailed one-sample t-test; 0.05 a-level; p<=0.05).
d**Indicates that the mean is not significantly different from a neutral mean response of 4 (two-tailed one-sample t-test; 0.05 a-level; p<=0.05).
Statements Agreement ratings of FCMC members Agreement ratings of FCMC consignees
Mean a Standard deviation Mean Standard deviation
Consignee products enhance the sales of my own product(s) 5.55 *b 1.29 4.74*a 1.26
Products at Wooden Memories and Gifts are displayed well 5.18**c 1.33 5.06** 1.57
Member(nonconsignee) fees are reasonable 5.09 1.38 4.07***d 1.63
Wooden Memories and Gifts and FCMC take genuine interest in promoting and selling my product(s) 4.91*** 1.45 5.32 1.42
Consignee commission rates are reasonable 4.91*** 2.12 4.19*** 1.62
Wooden Memories and Gifts has been successful in its first year of operation 4.64*** 1.29 5.20 1.10
FCMC will continue to operate for many years to come 4.27*** 0.90 5.00 1.31
Products at Wooden Memories and Gifts are well promoted 4.18** 1.60 4.65 1.40
Wooden Memories and Gifts will continue to operate for many years to come 3.73**, *** 1.90 4.87** 1.59

The mean responses for three of the statements were found to be statistically different between cooperative members and consignees. Cooperative members were in more agreement than consignees with the statement that consignee products enhance the sales of my own product(s), although the significance was found to be marginal (p ~ 0.10). Relative to cooperative consignees, cooperative members were also in more agreement with the statement that products at WMG are displayed well. Finally, cooperative consignees were in more agreement with the statement that WMG will continue to operate for many years to come, compared to cooperative members. Collectively, cooperative consignee responses to the nine statements provided an indication that they possess a much more positive and optimistic outlook and perception of FCMC and the WMG retail outlet than do cooperative members.

CONCLUSIONS

One interesting result of this study is that the gaps between consumer importance and satisfaction ratings of cooperative retail outlet attributes were found to be quite small; only a single attribute (i.e., price of products) had a gap greater than one. This result provides a good indication that the cooperative retail outlet was meeting the overall expectations of WMG consumers. Despite clear indications from survey results that consumers were willing to pay more for cooperative products relative to conventional retail outlet products, other survey results suggest that the type of outlet (i.e., cooperative versus conventional) has no effect on consumer price sensitivity. In other words, product price elasticity does not appear to be influenced by re- tail outlet type. Therefore, caution is advised in setting cooperative product prices; they should not be too divergent from similar products sold at conventional retail outlets.

Another interesting result of this study was that cooperative members and consignees viewed FCMC's services and operations in a very similar manner. Only 6 of 30 questions asked of both members and consignees were found to be statistically different from one another. This result suggests that the use of a consignee business structure by cooperative members does not hinder the goals and operations of the cooperative.

One limitation of this study is that it concentrates on a single wood products marketing cooperative and retail outlet. As such, the results obtained in this study are not likely to be directly reflective of other wood products cooperatives. Several contextual and structural issues contribute to making wood products cooperatives different from one an- other in some respects. Another limitation of this study is that the cooperative studied has had a limited history. At the time of the study, the cooperative had been in existence for only 10 months. Several other wood products marketing cooperatives have had existences greater than a decade. It is possible that business tenure could have a significant impact on consumer, cooperative member, and cooperative consignee results. Finally, one should note that the sample used for the consumer survey was not representative of the general population; only individuals that had either visited the co- operative retail outlet in the past or had purchased a product from the outlet were included into the consumer survey sample frame. Therefore, the responses provided by participants in the consumer survey may be systematically different from potential consumers that had not had an experience with the cooperative retail outlet.

Given that the present research was in large measure an exploratory study, numerous avenues of exploration exist for future studies of wood products cooperatives. For example, survey research focusing on multiple wood products co-operative outlets would provide information on whether different structural characteristics affect consumer, cooperative member, and cooperative consignee perceptions. It is also suggested that future studies attempt to identify and examine the specific benefits that consumers perceive that a community receives from purchases made at a cooperative retail outlet. Identification of these benefits can be exploited in promotional campaigns that increase consumer awareness, as well as decrease consumer price sensitivity to cooperative products.


Authors

The authors are, respectively, Assistant Professor, Graduate Research Assistant, and Professor, Dept. of Forest Prod., College of Natural Resources, Univ. of Idaho, P.O. Box 4411342, Moscow, ID 83843-9001. This paper is Contribution No. 921 of the Idaho Forest, Wildlife, and Range Expt. Sta. and research was supported with funding from the Inland Northwest Forest Prod. Res. Consortium. This paper was received for publication in April 2000. Reprint No. 9114.
*Forest Products Society Member
Copyright Forest Products Society 2001.


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