Vision 2020 Meeting BIA Masonry Planning Policy Strategy

1. Vision 2020 MeetingBIA Masonry Planning Policy Strategy June 4, 2009 Schaumburg, IL This report is for presentation purposes. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from BIA and Ducker Worldwide LLC.

2. A clear mission drives the BIA BIA’s mission is… “…to promote and advance the clay brick industry with the goal of increasing its market share, and to safeguard the industry.”

3. BIA has established 7 strategic goals I. Increase the offering and use of brick by production builders II. Expand the use of brick by custom builders III. Maintain the high level of consumer preference and desire for brick IV. Establish favorable perception of labor and brick masonry trades V. Aggressively represent the Brick Industry before public sector entities (environmental, operational, federal, local etc.) VI. Increase the specification of brick in non-residential applications VII. Commit to developing ongoing knowledge of influencers and market characteristics

4. BIA Consolidated Regions All regions of the BIA are engaged in masonry planning activities and utilize trained planner expertise and effective sales, prospecting and measurement tools

5. The term ordinance is misleading and too narrow of focus as states and localities may have laws against use of ordinances but embrace policies that can limit or favor specific materials MPP activities are a critical and valuable tactic for the brick industry to support and pursue in conjunction with other strategic marketing programs Securing MPP’s is a complex, varied and time-consuming process often most successful with skilled planners representing the industry Critical components drive success of MPP’s for the industry: Balance of residential and nonresidential applications/land use Limit materials allowed in MPP to true masonry Target high growth markets or markets with sound construction activity Spend resources effectively on high priority markets to the brick industry Use proper research, prioritization and measurement to guarantee highest rate of return Introduction to Masonry Ordinances

6. We have learned from research • A comprehensive research program included the collection and review of a sample of ordinances and polices (300) across the different brick regions • Further research with planning officials, local construction industry personnel and brick industry planning teams yielded great insights: • The current material share in a municipality has an impact on how much more share can be gained – diminishing returns vs. instant growth • A combination of residential and non-residential ordinances in the same market may provide the largest gain to the brick industry • Few MPP’s require brick specifically - there are a lot of masonry and brick/stone ordinances • There are also a lot of masonry ordinances which include stucco • There are many ordinances/policies that allow 5-7 materials • Many MPP’s only apply to very limited land uses - certain districts, downtown areas, Planned Unit Developments (subdivisions)

7. The language and land use of MPPs is important • Most historic policies are nonresidential based • Single-family is lower than anticipated and often very difficult to achieve • Most policies list multiple materials (over 5) as acceptable • Masonry ordinances are prevalent, however include block, glass, stucco, stone, tiles as well as brick • Policies that are exclusive to brick are rather limited

8. The BIA has set specific objectives for its program The research, analysis and planning discussions support the development of new objectives and considerations for the MPP planning process: MPP Objectives • To pursue the development and passing of masonry planning policies that increase the use of brick or defend bricks position in the market • Offer full service and support to solidify relationships with communities (product, technical, regulatory, planning ) • To apply a collaborative, strategic and efficient process in all MPP efforts • To commit to use of effective tools, ongoing measurement and to adoption of new strategies based upon results • To achieve a positive ROI on industry spend for MPP effort • To report out results in a comprehensive fashion on a regular basis

9. Research based approach is applied • A pursuit model has been developed and put into practice to address the following: • Given limited time and effort of individuals, which markets should I pursue? • Which markets are more important than others? • How can I balance my efforts by land use, region and impact to the brick industry? Rank Order of Priorities BIA Planning Team Expertise Pre-Selected Municipalities ROI Pursuit Model Clusters of High Priority Targets Customized Clustering (region) • PURSUIT MODEL INCLUDES: • Type of targeted MPP and strength • Land use • MPP Adjacency • Wall cladding area potential • Construction activity • Population and employment growth • Planner expertise New Information TACTICS - ACTIONS

10. The outputs provide efficient prioritization • The Pursuit Model output provides a rating scale to understand overall ranking, differences in appeal and ability to cluster using different factors such as region I am going to visit North Florida, which communities should I focus on? I just got a call for a potential policy in a community that has 10,000 population, how should I prioritize? What effort should I make?

11. A measurement model is used to help quantify benefits • A comprehensive model that combines objective and subjective inputs was developed, with the focus of local gains in brick volume and value driven by MPP efforts Evaluation Model Model Inputs • Evaluation of MPP Language • Cladding materials • Percentage of wall area • Land use • Model Outputs • Estimated brick volume increases and return to the Industry • Forecast potential gain to brick industry in dollars • Assessment of unattractive vs. attractive markets • Evaluation of defensive and offensive results • Understanding of methods to strengthen or leverage MPP further • Current Brick Share in Market • Cladding materials • Percentage of wall area • Land use Measured change in brick position and potential contribution Tied into brick share and brick volume/wall area calculations Balanced with critical local market conditions and planner expertise • Construction Activity • 3 years prior to ordinance • Future estimates for 3 years after ordinance • Other Demographic Data • 3 years prior to ordinance • Future estimates for 3 years after ordinance • Longevity Benefits • Score to illustrate the longevity of MPP in the future

12. Now the results are clear and return is significant • Since 2007, over 50 Masonry Planning Policies have been passed in the Midwest-Northeast, Southwest and Southeast regions generating over $3M in incremental brick business over the forecast period 2007/ 2008 Masonry Planning Policies - Listed by Location - • Masonry Planning Policies vary in terms of benefits to the industry • Residential vs. Non-Residential • Limited Number of Approved Materials • Current Market Share • Percentage of wall area required • It is not the number of Masonry Planning Policies, but is the quantity of brick mandated by the policy that will yield the highest return for the industry

13. A multi-step process defines actions and success • A proven process using planner expertise, effective prospecting and sales tools and ongoing support has been developed and implemented: • ROI Intelligence and Pursuit Model Review and Planning • Prospecting Support and Filtering • Targeted Initial Contact • Community Follow Up • Planner/Official Meeting • Presentations, Follow Up, Support • Policy Recommendation • Planning and Zoning Consideration • Voting Processes (Stages 1 -3) • Approval and Enact Policy • Measurement • Critical to the success of MPP efforts across the industry is to share learning's, experiences and outcomes across the regions Ongoing Development, Support, Learning and Communication

14. Conclusions • MPP activity is a time consuming, unpredictable process that needs to managed and involves many steps • Knowledge and expertise regarding municipal planning and zoning generates best/most efficient results • The language, land use and share position of materials have the greatest impact on return to the industry in an MPP • Fact based, research led priorities drive efficient use of resources while increasing returns for the industry • Measurement provides indication of value for expenditure, but also key insights and learning's to use in future efforts