Division of Agricultural Sciences UNIVERSITY OF CALIFORNIA THE CUT FLOWER INDUSTRY: An Analysis of Its Growth Potential D. B. DeLoach CALIFORNIA AGRICULTURAL EXPERIMENT STATION GIANNINI FOUNDATION OF AGRICULTURAL ECONOMICS Mimeographed Report No. 214 January 1959 i Table of Contents Page Introduction ....» ^ Factors Affecting Supply • • • • ^ Present Marketing Channels Characteristics of the Present Market 15 Can a Change in Marketing Methods Expand Consuiqjtion? 21 Requirements for Mass Merchandising 25 Problems of MfiTket Development Conclusions • 39 BdJbliography List of Tables Table 1 Cut Flowers, Potted Plants, Florist Greens, and Bedding Plants Grown for Sale, by States, 19U9 and 19Sk 2 Growers Selling Floral Crops, Total Sales, and Amount Sold Per Grower in California, 19U9 and 19514 7 3 Retail Florists and Retail Growers, Sales, and Average Sales for the United States for Selected Years lo Figure Figure 1 Floriculture, by Size of Establishment, 19U9 9 > • • a. * » • « *♦ % » « • € « -t ©IdeT » •- * : ■ ifidomk brer » • * * • (> • • • .. tU'O lib 'P.: ■ 0 £ .7 '0' 4 s.viB xrf 3f r •c^^.'co ci eaoi'Stt awsntrjrti ^oimCov seXea i„.£w „ii»}<4^9 8ii} 8« XIaw cii as*tt;.tJ-bneq:c& 1o a-Xftdiaq bos iS^idari gnivil tsr^sc* •stectttsnn? •'2Xidi!3:; e,. : j . ... -iTco oj-iiil fsLot (tofM-"it^V.it tol .83(jt6ftil rbtaeqsjt tsdalldx/q bc ifljcvseri i)©x.£m -i4c 'cdei^A& ^vitR&^, itiS'i^i ^cansjb x^&ztt^nl -isrwlJ i^o er£t 'jto x&ioRq&o evi^o/zbinq .X^xf,5i3[} b9v6im.L 548 cbi^iif .^Bsiacj* l;o..m©l f*.^ amro'is r»'?o. s $v.hk bJife- ti^XiiTsiiioo -sxtr^^^aq^^^^ brs '=v-rjA*srr-.f ^:^v''j", f'-rfoi^^tt .gp2Xb««ri bavc-t^^^^^ .xio2.-lfcr a a"! 3. quality en route to market and to make possible the shipment of flowers to more distant market centers. The expanding output of carnations, chrysanthemums, gladioluses, and roses in California, Colorado, Florida, Illinois, and Iowa for out-of-state consumers apparently has been feasible because of iii5)rovements in transportation facilities for handling flowers and the speed with which they are moved from growers to consumers. No reliable statistics is available on how much recent technological im- provements have affected yields per acre or per unit of greenhouse area, but some light may be thrown on these effects by a comparison of the changes in pro- duction under glass, open-field acreage, and numbers of growers with the changes in total sales value of the products. According to the 19$k Census of Agriculture, an estimated 142,085 open-field acres and 3,875 acres of greenhouse space were used for commercial flower pro- duction. The space used to produce cut flowers, potted plants, florist greens, and bedding plants under glass rose about 2.6 per cent, or about 96 acres, be- tween 19149 and 195U. Open-field acreage used for growing the same types of products decreased about 17.8 per cent, or 9,11^2 acres (Table 1). The number of greenhouse growers was 7 per cent, or 1,089, less in 19$h than 19k9, while the number of open-field growers in the above group of products was 22.6 per cent, or 3,229, less than in 19U9. Despite the decrease in the number of acres and growers, 1951i sales were up $12,000,000, or 5.1 per cent, above \9'h9*^ Because of the lack of com- parative price statistics, it is impossible to know whether the increase in sales value was caused by a higher price level or by higher volume. The sketchy price information that is available discloses no perceptible change between I9I4.9 2/ No comparable production statistics is available. Sales data have been used as an indication of volume produced commercially. This type of statisti- cal comparison wealcens most of the published findings. awcl. bns tS/o;xc.p:i ^af.>^-roI1 ,oij»'ioXoO .simeliiXsO xsi sseo-s jr^ro ,a'5ei.'Xf>f?5r--,'^ . .--^irfH besqe sfLt M-^ eit.wyii \jn.Lii>ri£d icl aai^iXxoAl aci^^tocfens-xi' •»oig rd aa^y^rfo sdi 'io rtoa.cssqi.rdo & Tjcf eiartlls 9R9a-> xto t.rr-.'xdf DdT Trnv trfnif .-^rvr.r^ ■ OfW.rliii^r 819MVt8 to alecfcHJH bm ... Men-Ac'qc ,a£:..:,. '..■.;rf«/..floi.-i-.. .a^cu/boTtq- siii '!o si/Iev boIss Iccfod-- ni >noqo 580, S»i bsJ-«mjE:#8^ ns tSttf^fffiJ-nA. In ai-ennO ti^QX etlt of ntx^Syto-rryU -oiq[ ^ujn leXytamno lol foam/ : .... ,-£^,0/^ xo aotoc ujr sX ^aox^Blts^a -^vlfs^ci .ftrnt'Cr-^- .T'^.d^Jr! vcT to X-pvnT A^f-ra i-t'i" • !:.?8: 3r I TX £8 OX " or li- at 0 cox 0 Vd Q£ - 0 • ox <;x. « OS. ox - 0 TX ilt TX T 0;; T 0 c ?.0 x.o P.O 0.^ T.i! 4.0 3,X. 8.0. 5.0 s.ax X,3. ■ ii.£. ?.X €»X, 3.0 ^^O 4.S. 8.9.. 5.O.- 3.0. ; O.X.. COX s.a T.TX e.x. x.o 3,c" r I' -. 3.31 O.X a.o O.X 2. e p.- -"^ >:■:' •■ i X.£ 8.x. 6*1. 5»0 O.X. 8..S 3. '^, 3.5. 3.C 3.0 ?.0 ?.G •••* ^.X S . .. S.X': S.O (5 0.S 3.0 5. Table 1 continued. Grown under glass Grown in the open ! ue of sal es ir-er- 1 Per- centage i t cent age 19U9 195ii centage State 19U9 195U i change 19ii9 19^ ! change change millions of milli ons of square feet acres dollars So. Cakota 0.3 O.li 33 20 10 - 55 0.3 0.6 100 Tennessee 1.7 1.2 - 29 525 390 - 26 2.5 1.3 mm U8 Texas 2.6 2.7 k 2,27U 7U5 - 67 5.2 U.6 12 Utah 0.8 0,7 - 13 110 125 0.9 1.0 11 Vermont 0.3 0.3 0 U9 li7 - k 0.5 0.3 Uo Virginia 1.6 1.3 - 19 2,270 1,067 - 53 3.1 2.ii 23 Washington 3.7 3.6 - 3 699 833 19 l;.5 U.li 2 West Virginia 1.2 1.0 - 17 ko lli6 265 1.5 1.3 13 Wisconsin U.o h.2 5 622 319 - 1x9 5.8 5.5 5 Wyoming 0.1 Ool 0 U 3 - 25 0.1 0.1 0 l61iJ0 168.80 1 51,227 I;2,085 235^70 2U8.10 Source: U. S. Biir&au of the Census, United States Census of Agriculture: 195U (Washington: Govt. Print. Off.). i i lob 1 1 OOX : 84 - 5X - : XI ; Oil- - ^ es - i 5 . u - i 5 - e.x o.x •S.a- e.x ■X.O, . 15. s 5.1 8.5 x-.o - • ^x 4' - €5 - • ^I ■ U - . 5S - i - 1 OX Q5e 5;iT 5SI Til Y^tX ZiB bd£ e i OS 1.525 ars.s -■^ r 0 ?x - p . TX - 5 . 0 4..G § r T.S ,Q,£ r f r S.I s,x 0,4 • Bias "i i . 58o^sa TSStI5 , ; ' 1 " d ■■ 'i * t » ' * : % 6 and 19$h in the wholesale price averages on the major flowers, although there was a considerably greater range of prices in 19h9 than in 195li. It would ap- pear, therefore, that an increase in volume accounted for the change. In addition to these Census staUstics, special studies by Sinith^ in Florida and Radsk^ in California reflect the rapid strides in production being made by the industry in those states (Table 2) . Newer technologies have enabled Florida growers to expand their production of chrysanthemums and gladioluses, in particular, which makes it possible for them to supply the greater part of these flowers to the early season markets on the Atlantic seaboard and the Mid- west. California growers contacted by Rada reported large increases in yields and quality as a result of their ability to control moisture and temperature in plastic and glass-covered greenhouses. Although there is no way of estimating the extent to which greenhouse space and open-field acreage now in flox^ers can be used more intensively by applying improved management practices, University of California floriculturalists be- lieve much improvement is possible. Underemployment of Supply Factors .-- Small growers, in particular, appear to have some problems in utilizing fully their land, greenhouse space, and labor for producing flowers. Fossuit^ reported a widespread use of greenhouse space for storage and display purposes and a practice by many open-field growers of producing only one seasonal flower crop. While each of these management practices 3/ Smith, Cecil N., Florida's Flower and Nursery Business (Gainesville: Uni- versity of Florida, December, 195^^), Economic Leaflets, vol. XV, no. 12, pp. 1-U. (Bureau of Economic and Business Research.) h/ Rada, E. L. , "Floral Wholesaling in Southern California." (Unpublished re- report.) 5/ Fossum, M. Truman, Commercial Floriculture (Washington: Govt. Print. Off., 19^) > p. 5. (U. S. Department of Agriculture Marketing Research Report 97.) -ed «i8£X8ittt*XaDiloXl sirttolxXaO lo ViwtVMU \zeoli9&^i:i : ;:.-..voi*.-u: o^riya eai(oruioeii) >o agi' bR3i.q:iQbh-: a be.tioq^i ^^/aeo"? .aiewoX? i^tauboiq iot : it^ofiiq daena^BfixM seed* Oo das© eXiift? .^v oli. i^ i-a^jK ^,ao ^^»o 5.uui.i.ui:q - - ^ ^ „ mm m, ^^^^ m. ,m „ ^ ^ ^ ^ ... .»»««, ^ „ , 'iif*S . . . .or! fYX .. ■ ( .rio-aseao/I r;;jsn.£^ri8: ' ifA :,. ' 7. TABLE 2 Growers Selling Floral Crops, Total Sales, and Amount Sold Per Grower in California, 19h9 and 1951* Growera Total sales \ Sales per grower Area Year Number Percent- age change Amount Percent- age change 1 Amount Percent- age change dollars dollars | State total 19U9 19^h 1,838 1,501 -18 2ij,ii63,10ii 32,lj 80,875 + 33 13,310 21,639 + 63 Bay area^ 19149 19$h 628 550 -12 12,Ii39,389 15,735,357 + 26 19,808 33,265 + 68 Los Angelas area^ 1919 19Sh 761 597 -22 9,U78,081 12,2U5,767 - 29 12,l)5l4 20,512 + 65 Santa Barbara area 19h9 l9Sh 50 56 +12 3U5,390 905,015 +162 6,908 16,161 +1314 San Diego area 1919 195U 172 133 -23 1,251,663 2,221,325 + 78 7,277 16,702 i +130 Other areas 19U9 19$h 227 165 -27 9U8,581 l,373,i4ll + U5 i ii,179 8,32U ! I t 1 + 99 a/ Bay area includes: Alameda, Contra Costa, Mailn, Monterey, Napa, San Francisco, "" San Mateo, Santa Clara, Santa Cruz, Solano, and Sonoma counties. b/ Los Angeles area includes: Los Angeles, Orange, Riverside, and San Bernardino. Source: U. S. Bureau of the Census, United States Census of Agriculture: 19l49 and I95I1 (Washington: Govt. Print. Off.). S SJfiAT ' i -! i . . . ■'. ■ I- ! ' . . . u •+ . <;•. 1 1 ) ■ 1 • eh ■ ; i V $d + X', • . ■ ^xo, ^^^^ i ■ . 1 1 <^ : ■ t -'^'^ ' .1., ..,:mmi .1 2<^X ... > i iic^:X ! , 1^<♦•^ .' > ■ctaO orfi loiyfifistwg .E ■ wye 8. might be advantageous to growers under present market conditions, they indicate an availability of growing space if it is needed. Many growers were engaged in selling their own products as a means of using their time more fully. Growers with sales of less than $10,000 annually sold more than 7^ per cent of their output directly to consumers (Figure l) . The per- centage of sales direct to consumers as a part of total firm sales decreased as the volume rose. Conversations with a number of growers lead the author to be- lieve that the combination growing and retailing activity often provided growers with the best outlet for their own labor and, frequently, that of some members 6/ of their households. Rada in his study of the Los Angeles flower market-' ob- served that growers engaged in selling direct to consumers and retailers were doing so mainly to gain nearer full-time employment, but also to satisfy their desire for a change in their type of work, with an opportunity for regular con- tacts with other growers and trade people. The 1950 Census of Agriculture shows that growers depended on part-time paid employees and unpaid family labor for more than 38 per cent of their labor force. It also disclosed that the year- round earnings of workers in firms with sales of less than #200,000 annually averaged $1,700 while those employed by firms with sales of more than $200,000 annually averaged $2,000. Growers contacted by the author claimed that smaller operators were unable to use fully their employees' time in small-sized opera- tions. This would seem to be a further indication of the underemployment of production labor in the cut flower industry. Ease of Expansion .— Horticulturalists at the University of California and flower growers believe there would be no problem in greatly increasing the out- put of flowers on existing acreage and in greenhouses provided market conditions were favorable. While there are periodic shortages of certain types of flowers 6/ Rada, op. cit ., p. U. *" ' ..... ' " ' ' - '■ '. ' -^ro ti-iii^3%_ -idi ;pmiij'roi-3,t,? ..dftOaio loriijjs aif^^-^jT '. ' •/b wt-fwr-tO .PQ<^| i>©5S:)ii0j(>^it^^^ ;;>'■. bxc-tj'sfj , , \.:.c,\^ Jfi'-tvm' ^^9-T'>.^^ sgi^^xxe nu Q'i9wo..fl 'to &isq Plorkulfun, by Size of Establishment, 1949 CHANNELS OF SALES BY GROWERS SIZE OP eSTABLISHMENT ♦ ALL ESTABLISHMENTS LESS THAN SIO.OOO • S 10,000 - 24,99? ••• 25,000 - 49,999 •• • 50,000 - 74.999 • • 75,000 - 99,999 100,000 - 249,999 250,000 AND OVER 0 t X OF TOTAL SALES 25 50 75 too V///////////, T ■mm y///////////AmmmKm v///////////y/Ammm w///////////AWBom ' ■ ' ' HI To wheitMltr* (2229 To rttalltrt I ■ -I To contumtri u. t. oePA»Ti»eNT w AomcuLTURe neo. u24>ss(S) acricoltoral marketino service I 1 10. due to unfavorable weather, the total supply of all varieties appears to have been more than adequate to meet the demand. By e3q)anding only slightly the open-field acreage and greenhouse space devoted to flowers, a heavy volume of each of the major kinds of flowers could be brought onto the market within a short time. The amount of open-field acreage that one grower can handle varies greatly with the flower crop. It appears, however, that 1 to 2 acres would be maximum for carnations, chrysanthemums, and gladioluses. The use of plastic covers speeds up construction and greatly reduces the initial capital investment in greenhouses. While the more permanent-type, glass- enclosed structures are preferred by most operators, a permanent structure is not essential in the production of flowers. Plastic-covered structures also are adequate should growers decide to introduce ten^jerature and moisture con- trols for increasing output and quality. While no reliable data are available as to the minimum investment in com- mercially operated greenhouses, Dr. Harry C. Kohl, floriculturalist. University of California, Los Angeles, and his associates estimate that small, plastic- covered houses will cost between 25 and 3$ cents per square foot without heat. The 1951) Census did not report greenhouses of less than 6,000 square feet. If this figure is used, a minimum investment of $1,500 to |2,100 would be required for such a structure. However, it is known that many part-time growers now use far less space than the minimum mentioned in the 195^4 Census. This low initial investment would attract commercial fruit and vegetable growers to floricul- tural operations if market conditions were favorable. Furthermore, the low in- vestment requirement continues to make it possible for workers of foreign origin to find self-employment in the flower business irdien it is difficult for them to find gainful employment elsewhere. This has been particularly true with many Japanese-Americans in California, Oregon, and Washington. r'iijcrcm'i^a. ^i.oUii.-ntoq'fi .^/ewchprtraqo "c^ifjo.T! v,cf fcerrialeiq ets'r3ST:0.to.e'.(;.j-fi b'.jcaiaft^ , ^'^ iJ-B'ioci bos dia&iytBismt .^/tib" Siijwoig fc^i^v; • .... .^,-..v....,i iV;.-.^up bits '*cqtuo f^mxes'Sit': • ^Xaivt -'•.-i:! ''f •tt.'^'' r.' , -jpVpvoTT . rfrira'"*::)"'' .iji^^AeO >^^.'^' " ■.drij..OiJPi.i aiifMii:.^, r.. 'q:; sr^f ■ '' •X d-l neifcr geshiijifc^ TtsjroXl art? ai ^nscr?;: v/t-',;?! rf,fi:w 9xrr;t ^vCt5.frici'"v rf^ncf .i??!! j^.^t^ .r^'.v-f.'f^pi.ro •^r •.->:-:••••-:/. .r:.'>f»i-.- 11. The Pressure to Increase Output,— The adoption of newer production methods has raised -ihe capacity and output of the floricultural industry. At the same time, growers have had to absorb higher total production costs brought about by a heavier investment in facilities and equipment as mil as higher prices for supplies. Faced with higher production costs, growers must utilize to the best advantage their labor, land, and facilities as a means of keeping total and unit costs at a minimum. This condition tends to exert pressure on growers to in- crease output, with a resulting unbalance of total supply with total demand. Land speculation is a factor of unknown importance in maintaining flower and nursery crop production on land adjacent to or in metropolitan areas. Grow- ers contacted by the author in various parts of the United States have referred to the long-time coital gains that can be obtained from holding land in urban areas, even though current income from labor and capital may be lower than that in comparable occupations. Present taxes applicable to current income and long- time capital gains encourage marginal operators to continue operations on the theory that the rise in capital values more than offsets the loss of income from current operations. With the rapid rise in land values in metropolitan centers during the last few years, there could be a good deal of truth in such a line of reasoning. Present Marketing Channels In view of the sensitivity and pressure on the supply side of the indus- try, an examination of the methods now used in marketing floral products seems appropriate. Growers usually have a choice of selling: (l) direct to consumers from their own retail routes, retail road stands, or stores j (2) to wholesalers and jobbers directly or through commission men or consignment brokers j or (3) to retail stores, A few aspects of these types of selling are discussed below. -r;9f> .fs*oi riJ-i:-? Y-C^fj-'s lio '^onrvf'scfrTtr -.ri \+'';j?.?rJ r: rf -^iv . .*n -in'-cfit:': •i& aci£Ioijc*ti.eni ni pi iaep^l^a l)mS. :si m ^ ■ \l cfcto, Y^imim, bm Hit lo 830l erfj f:d-s8i'i<: fTRffj aiDoi e;9x;X, qtjo rtx oai^ orkt tsiid* v. « el 12. Direct Sales to Consumer . "-The volume of sales made direct to consumers by commercial growers is believed to be small. It is seldom possible for a grower to maintain a retail store that depends solely on his own flower pro- duction. When growers do enter the retail-store flower trade, they do so on the assumption that, except for certain seasonal operations, the bulk of their supplies must be bought from other wholesalers. The production diversifica- tion needed to completely supply a retail flower shop would be a physical and economic impossibility. Roadside stands and retail routes are quite common in most sections of the country. They afford a seasonal market outlet among consumers who normally do not buy flowers through established retail stores. A minimum of service is in- volved in these sales. Should the sale of cut flowers through retail food and variety stores increase, there is every reason to believe that the number of roadside flower stands and retail routes would decline, particularly if the same forces are at work that are found in the marketing of fresh fruits and vege-- tables, namely, the unwillingness or inability of growers to spend the time needed for retailing operations as long as more profitable alternatives are I available. Retail route sales of cut flowers by growers are of negligible proportion. The research literature makes little reference to route sales, and only an oc- casional reference can be found in trade journals. It appears that there is some seasonal movement of flowers through this channel; however, there is no indication that retail route sales are or will become of any great importance ■ I as a means of marketing flowers. Sales to Retail Stores .— According to Census data and trade information, it is doubtful whether more than 10 per cent of the total dollar sales by grow- ers are now made direct to retail stores. Such sales are of much less importance in large metropolitan centers than in medium- and small-sized communities. ... iaLd&lxuvi^ "30 iTfi -^^^o faaSjaeXfia oJj:f(> V • eijr.:Vie:>istr-- ol^^^ S'SA'^r.;- ,.'7ir;Jv5 j;.^ji:£ fi-'mnp.s^ (>.r?T , - ■'■ ■ ■•••.'•■'T:'-?oA -jfiicrif...... • -,4=. 13- Sales to Wholesalers a nd Jobb ers.— 'In the past the close proximity of growers, wholesalers, and retailers permitted purchase and sale by inspection. As the principal growing areas moved farther from markets, sale by inspection became less feasible. Yet, the lack of adequate standard grades have handi- capped trading on a specification basis. For this reason among others, growers now diip Idle greater part of their flowers to commission and merchant vAiolesal- ers on consignment. This practice affords buyers an opportunity to inspect the shipments and eliminates much of the risks merchant-vtoolesalers would incur by outright purchase. Reduced to its simplest form, the system provides the grower with a mechanism for getting his flowers to market and offering them for sale to idiolesalers and retailers. But it means that all risks except selling charges, if the products are not sold, are borne by the grower or shipper. Moore^^ reported that all floricultural products sold in Chicago and New York City move through commission or merchant wholesalers thence to other whole- salers, jobbers, and retailersj and that 8U per cent of the floral products handled by these commission and merchant wholesale dealers were received from growers on consignment, Taylor^ reported that most of the cut flowers and potted plants sold on the W^ishington, D, C,, market in 19^6 moved through wholesale-commission houses on a consignment basis. He mentioned, however, one group of growers in this area who sold direct to retailers. Another group used existing i^Aiolesale chan- nelp regularly except for certain holidays when the growers dealt directly with ret^ler^. 7/ Moore, Elmer J., Wholesaling Floral Commodities in the Chicago and New Yorfe City Markets (Washington: Govt, Print. Off., 1957;, p. 9. (U. S. Depart- ment of Agriculture Marketing Research Report No. 175.) 8/ Taylor, Earl G., An Economic Study of the Washington Metropolitan Flower Market (College Park: 1956), pp. 1 and li. (Maryland Agricultural E:!q)eriment Station Miscellaneous Publication 275.) noiJ-oeqeui-^d' eXuR 5 5.te>''sein-;^fO'Jl isriJ-tfil -ijsvofr ojS0-?5. o^^rnta ["crr^n^T off.* y4 're\T!vt^ t?f{^ .eebXvoiq nrats-^a .vii& .^F.^n"^- *p.^Fir-^r. c.t bcD/.-hpS fOzy^^ziw' i-.rf^^y.ti'o lol WDf'-t snx-iollc .^ff:n;iiV:.. c-:sf.fe>A.4 .sill ga;:^^:!>s._troa-.^3*iiJ_aviciii; e, :^Ji^ tto-fr^-i^ to "savrots t-irft --r; st^-ird ,. ^^'^o--,. -ten. .B^c^0'^?p't<5_^■J.-f> .f^r waM' fens cgsoiriO..,x jj.LOi.. e^^r.^ii^'-iq ic^^UJ^^iff.oi- Kl^^,jfy. j.X': .^s»v:. I4, - Consignment sales are of lesser importance in markets where growers do a considerable part of their own marketing. This is true in the Los Angeles and San Francisco market areas, particiaarly for cut flowers and foliages sold in the state. For out-of-state shipments, consignment selling is greater, es- pecially when the deals are with central-market wholesale dealers who are pri- mary distributors for smaller wholesalers and jobbers in the region. I While it appears that specialization is growing in the cut flower trade, as is evidenced by the groirth in the number of special buyers in the Los Angeles metropolitan and other markets, there is no indication of an increase in the number of dealers that actually take title and physical possession of the flow- ers. The buying specialists described by Rada^ in his study of the Los Angeles market appear to have the job of selecting products in the wholesale markets and delivering or holding them for their principals (retailers) for a commission. Such an arrangement provides the retailer with a skilled buyer who recognizes and can select flowers of the desired quality characteristics. This service relieves the retailer of the necessity of personally visiting the wholesale market in order to get what he wants. In an industry that largely depends on sale by inspection, this could prove a very beneficial service to the retail trade . Wholesalers attempt to establish and maintain long-time business relations mth both growers and retailers. Central market wholesalers are often very solicitous of near-by grower interest. They assure such growers a regular out- let and advise with them on market conditions and prices as a means of assuring themselves a source of supply and minimzing the likelihood of direct sales to retailers. 9/ Rada, op. cit . asXesRA. eoJ 9.:rt ^lov.i/d Isloaqe' Ttt, 'ru^iajn o^irf-ni ff^^jy 5... Ycr'vs.oi;jooiY,-c>J'5 .-J<^f /".aj r-.-^ : -- anax„'sX?n aasnXaitd ©.Td'^-yficX ate^tft.tAfij bills- xlaH'discr'E'.s i?* •JqiG-^^.fA eti^Xse 15. Wholesalers are equally solicitous of their retailers. Generally speaking, they follow rigidly a policy of adhering to the established grower-^diolesaler- retailer market channel, introducing xdiatever functional dealers (commission men and jobbers) may be needed to facilitate sales. Characteristics of the Present Market Position of the Retail Florist .-^Although there were fewer retail florists in 195U and 1939 and the trade estimates a further decline between 19^h and 1958, they continue to occupy a strong position in the commercial florist trade (Table 3). While estimates vary as to the group's share of the retail cut flower business, it appears that about 85 or 90 per cent of the dollar volume is marketed in this manner. Considerably less of the physical volume of flow- ers is so handled, "Obligation" Buying and Frequency of Consumer Purchase . —Ret ail florists who attended the marketing workshop meeting in Washington, D. C, in 1956 esti- mated that more than 90 per cent of their sales are to customers doing "obliga- tion buying." Such purchases are for funerals, weddings, promotional gifts, and ceremonial occasions. Sales for everyday use in the home or office are of sec- ondsa^r importance. Gartiner and Breweri^/ found that Rhode Island florists* sales in 1955-56 were 57 per cent for funerals, 13 per cent for weddings, and 30 per cent for special occasions and everyday use. Other studies of the New York (1951) and Michigan (1952) markets show about the same distribution of sales. Because of their dependence on retail florists, growers become concerned over two developments in the use of flowers. The first is the increasing fre- quency of the request, "Please omit flowers," as a means of expressing sympathy 10/ Gartiner, Joseph, and J. E. Brewer, The Rhode Island Flor ist Business (Kiliston: 1956), 6p. (Rhode Island Agricultural Experiment Station Miscel- laneous Publication No. h9») -e^-'Ti^ .f^ri£!-»-Tun ...i^-l^S^.^-^'^ '^^^^i^ i-.'^^-'^: f^'.r!Q^.r,KLOUp& g7n -^i-^binser: ■ bns. t-aaaife>bw ;iQt *n0o. CX .< ,:3.XPWfc"i^ rrfy. itoso .tag' f?,'eTeiT:-r>:=-5<^if itE- -^Tss - ' V * . /* -S" V .4- ^Ji- *»f /* ■ *,r M .... ^ .J, /-^ ., <^ 16. TABLE 3 Retail Florists and Retail Growers, Sales, and Average Sales for the United States for Selected Years Year Retail florists and retail flower growers Total sales Average sales number dollars 195ii 16,279 1495,553,000 30,ljij.8 , 19ij8 21,730 509,729,000 23,14.57 1939 16,055 lii8,7Ul,000 9,26U 1935 ll,2i<2 98,718,000 8,781 1929 9,328 179,201,000 19,211 Source: U. S. Bureau of the Census, Summary Statistics, U. S. Cen- sus. 195ii (Washington; Govt. Print. Off.; T^T Retail Trade.) 1 • " f - • ocVtX^.. ^j. ^ ea^i ■• ■ fiSctQ '^r"^ . 17. or tribute; and the second is the decline in the use of corsages, tghich retail- ers attribute to changes in women's fashions in jewelry and dresses that dis- courage the use of the corsage. I Sherman and his associates^^^ found that only I6.I per cent of the people included in the Columbus, Ohio, consumer panel bought cut flowers as often as five times a year. The breakdown of the panel of cut flowers and potted plants purchases follows: Frequency of purchase Cut flowers Potted plants per cent per cent I4.7.3 39.3 11.6 18.3 16.1 13. 14 8.0 9.8 10.7 10.7 6.3 8.0 100.0 100.0 One or two times per year Three or four times per year Five or more times per year Special occasions only Never No answer Total Published reports on studies of the cut flower industry indicate very little effort on the part of retailers to develop a regular trade with buyers for home use. Trotter^'^ reported the successful experience of a florist in the Buffalo, New York, area in making weekly home deliveries of cut flowers on a standing-order basis. Two points were emphasized: (l) prices ranged between $1.00 and $3.00 per delivery, and (2) the arrangements were selected by the florist from seasonal flowers available to him. 11/ Sherman, R. W., D* C. Kiplinger, and H, C. Williams, Consumer Preferences for Cut Roses, Carnations. Chrysanthemums (Wooster; 1956), p. 6. (Ohio Agri- cultural Experiment Station Research Circ. No. 31.) 12/ Trotter, Warren K., Problems in Marketing Florist Crops (Ithaca: 19$$), p. Ti7. (Cornell University Agricultural Experiment Station A. E. 983.) pr-rc - -d& '^.o .t.T'?,-^ t.-Ml X,^I 'rl'^:? Je.'T.t V4. . - .,. . --^rtS ■' V -, -. ■ li.CI s.^ - 0.8 T.OI 0,00i o.oox TseY -130- ::- -nij -tto'i to ' " lowsra^. off [ , t • nf(9TjfJ-9iTq (X> ih:,^icsj:^:r^ 3;;iioq -^v'T .sra^^/ +ac'iCs.si:^J?usJ7; a xd b&ioaXea .9'X9vvacffi6inf»3ais'J'rfi ?iiir (S) i)^ tV^ovHsb- 'jcscr CC!. r| hr.R 0O.I.| ■ ^"f rr . ■ •" v . / . ;.. , 18. Since so great a part of cut flower sales are of the "obligation" type, dealers usually cannot depend on repeat sales at specified intervals. This means that the volume of daily business fluctuates greatly so that wholesale and retail dealers find it difficult to adjust the purchase of perishable flowers to demand. Under the prevailing conditions, inventories are kept to a minimum consistent with the operating experiences of each dealer, A poor decision on purchases and sales results in either heavy inventory losses or losses in sales. This factor alone causes dealers to stay fairly close to the more staple items that have a normal shelf life of several days and to deal sparingly in the more highly perishable flowers, particularly the exotic and more expensive varieties. This irregularity of demand introduces a risk factor in cut flower mar- keting that is conducive to a heavy reliance on: 1, Obligation- type buying, which gives some stability to total sales (but not daily sales) because they can be related directly to funerals and weddings. 2. Maintenance of an established price structure within and among markets. This facilitates telegraph orders and tends to equalize the amount and quality of services sold with flowers by dealers. The widespread acceptance of and reliance on the "obligation -buying" type market tends to circumscribe the activities of many retailers. However, this type of business gives relative stability to the total flower sales. Further- more, it is a heavy user of skilled labor, a fact that appeals to artisans such as those in the retail flower trade. For many small- and medium-sized retailer florists, the present methods of business afford a maximum assurance of a live- lihood for the operator and his family. It appears, therefore, that many of the established retail florists will resist changes in selling methods. In fact, such resistance already has been manifested in the internal struggle for con- trol between the proponents and opponents of a change to mass selling now going on within the national trade associations. ;:ixfr .fjifiTta^ni beixifoejjp &R es'Xco, fcfi!5)q!?b t^nnp'' vrr-figf' s-.-r 0/ I'O^t! e^s a&rToJ-ngvai lEnc.f 'riK' :<•:'■! ^•TfXir.YTX T lebwU .hrf-^'-cvh ■or!- -ptr^-'?!! 10 8?>ap.cr VT; ViPViii' ^jvserf lai-f^ie ni eil;f5ei bs-Css bras eosfirio^i'q ao no.cc I -^pd 0& t-.m 5%Bt Ifitf^/f^?, j-o oiif IXefls X^mion s ercif derfi sia-^.i.i: r,iqGU..e hicm Xi5o*-o* Y'^IXic!i5^3 9mii£S dflwojiis -ad.: Jpt) c^. ^ .aiftlet- . ./iOWoXl. 5>q-£.* •"aaa,Vxo''-r» tiR'u:i:cfo" ^x!,:f no safiisH'. i lins lo 90fiaJqpos/i ba^tqzabbe r-fiT •-©vxi s l-o ©r:nBtif83js lasmlxs/ff q buoll^ .s<.i>ni:t.t«3 to efaoriJe/n d-rrsssiq- Oi-t .sjsx-ioX'^ tJ!?al nl .o.. '.-.'vi ;/;.fXlB3 .r - i v;,^!;^;;* ' : ^v'Sj. v Li-a.' ;. I U-.j.x^.';^; v., -noij Tol f)i-g^".iz XexsT^Jnf: ©iit s\l h&S^^%if^m. n&arf sarf Yb*>^'^-ts' 'Sorui^ejtasT rfaoe 19. Inela stic Demand and Static Per-Capita Consumption . — In most of the trade discussion of the economic situation in the cut flower industry, there is an implicit assumption that the demand for flowers is inelastic or, in other words, the sale of flowers is not affected greatly by changes in retail prices. The assuii5)tion is probably valid for flowers sold through retail florist shops, al- though the statistical proof is weak indeed. The fundamental weakness of all the published material on demand elasticity for flowers and potted plants is the complete absence of good statistics on the quantities and grades of differ- ent kinds of flowers and plants sold at various prices. For all practical pur- poses, the analyses of total consumer expenditures for floricultural products are nothing more than comparisons of the total gross revenue from sales. They do not measure demand. ' The strongest support for the assumption of price inelasticity rests on the various estimates that (l) 8^ to 90 per cent of the florists' trade is for funerals, weddings, and other ceremonial occasions, (2) there is a fairly cus- tomary buying pattern for such occasions, and (3) purchasers of flowers for such purposes seem to give a minimum amount of attention to price. Although Rada's^^ report was based on an analysis of the southern Cali- fornia flower market, his remarks with respect to sales in relation to incme appear to be applicable to most flower markets that have been studied. They follow: I "Florists' sales in the seven leading southern California counties have paralleled the increases in personal income and population since 19^0, One would expect a stronger, more posi- tive, relationship between income, population, and floral sales, however. An increase in either population or personal income should increase total sales. When both are rising, total florists' sales should rise relatively faster than either popu- lation or income. Such a gain in sales did not occur between 1950 and 1956 in spite of unprecedented prosperity in southern California and a steady increase in the general price level. 13/ Rada, op. cit ., p. 37. ,3iJiow 'loriio fu t?.o o.t*8sIeni: si rsiwoll nci i^;je.T.efc s/Ii a-grlJ x-fc^Jq^^v^Sfi ii::>rXn:r.if ,eq«}j ^ i-ii'ixoT'l [£R&9)'i th,vu-u.^- ijloe axyiwii io1 bxLuv rJLd&dotq gi jfioxtq-^iiaas 8.^ -islq t>ei3x.~ das ft&woXl ■ ' .'iojc^a/:.!./ bnemfji? m> X&i'^>-J«.-f k;- v-^q •-tsiiKi V/ Cfsi^Bt?. hriB seid-i.|fis^;p -ado- xio -ac'ltai^^ jj? ^ora lo e.^nQads gd-sXqfnoj to'i ex Pfer,-i-i 's.rsjr-iolt gdi lo into tsq 0? o.t -^f. ..-^-Bxij gpJ:£.jTTi^39 seBiTiRV erf.t Vr - iMirocu pj ;toi 'slii'x ni aerfss .jj^c/i-.-.i iij-.;i,f •,r;.;fru.ii'-:,rf -e^ti ^^..iiajih^iii •lojx/i'.r. £j;a«o'i. CnrlX .boxhaiz aesd ovad ttsitt ?3vj^jfTisfii lawojEi Jberr.-n ©.J sXdaol-Xc^s ssBS.cZiLs^nq svircI a-p±^tB;>.-:r 3i.,.flSi?> jKi «*p,«'^oa± iiA ..aevsxwxi . vJ-yiJ rtuooo ci-qn .b-xL •S'i^X; - . :-.',f;";7 fj ;riin(S ...jsniocffJ: 10 ■/ic l ' '.i-if03 fii VxTr-qsc-rf^i ..c9>£: ; .i.r;. • ■ijT' -si-Jiqs .ni. oi?(^£ bxss 20 "Per capita florists' sales increased from $2.^1 in 1950 to $2.80 in 1956, When related to per capita income, we find that a 31 per cent gain in per capita income between 1950 and 1956 was accon^janied by only an 11 per cent increase in florists' sales. (The response was much stronger, but still inelastic be- tween 1955 and 1956.) This is a low consumption response for a commodity that is as universally accepted as flowers. If price changes are allowed for, per capita expenditure on flowers has actually declined since 1950. . . There is, however, no reason to assume that a similar demand inelasticity carries over to sales of flowers through other than retail florists' outlets. On the other hand, there is no adequate statistical evidence to support a case for price or income elasticity for flowers sold through mass market outlets or retail stands. Obviously, many growers and distributors are operating on the assumption that demand is elastic and present markets can be expanded and new ones developed. The Depressing Effect of Over shipments . —Under present conditions, the de- pressing effects of overshipraents by growers are sometimes very damaging. This over supply situation has been brought forcefully to the attention of Hawaiian vanda orchid growers TiJho, on a few occasions in recent years, have failed to get an^ returns from orchids sold on consignment because the soiling prices to wholesalers or retailers covered no more than the packing, shipping, and sell- ing charges. Stock growers in southern California have had their market completely up- set by a sudden and abnormal rise in temperature, \diich caused too many of the plants to flower at one time, thereby forcing all growers to offer their flow- ers for sale within a short period. Similar examples are available in other flower-producing areas to illustrate the impact of an oversupply on grower prices. ' ^ ! ^fidd iwi-'i /-^liri^.o .:>-;joi.^ "•.•.:.;•£. n*»r(/ 'f'.<:i " -od o.wa>vXeal lilts c^xref t'.3":flOTJB,..ii>:f^,,Risvr Scrto-f??©? sul) .tje.us . ■...a.oJiTrT IT ',tr.m!Ql'^. ho^rp Y,j..... -/.'it' el i/-,.:.; \ 3oso 6 *idqq«B o.+ aaoBbsv-s Xs-^x^siia-^s , &d'sj:/pei>ft oa eiaxit tbiiBti i-rf:^' , ?c) .•" 'woil 'i.xari3; ^silo ci" srwoirj .rcg '^TlotoXx'ieiQdf »no ^fe ^otfoXl ot BinsXa i3iIjO ni f'l^BrxfiVB eoCqsjr-'-* "yr^Icr.r?^ ,^')t7r:^cf .f-rofie e nid&'^'r ^ L r "r'-*: - 21. Can a Change in Marketing Methods Expand Consvunption ? Would Market Information Help ?— Part of the problem of oversupply concerns occasional market gluts. With hundreds of growers making independent decisions on when and i^ere to diip on the basis of inadequate market information, it is inevitable that some markets should at times receive an oversupply, particularly during seasonal peaks of production. Better market information would help growers adjust their shipments more closely to market requirements. But adequate market information wuld require some system of reporting plantings, harvestings, shipments, irdiolesale market supplies, and prices; and much of this may not be feasible because of the lack of uniform grades and the cost of collecting and disseminating such data for a small and scattered industry. If adequate marketing information were available and used by growers to regulate the flow of products to market, it is possible that growers' returns could be increased on the present total supplies without doing anything to expand total flower consumption. The fundamental problem of the cut flower industry, which is to find a satisfactory market for an increas- ing output of flowers from the present or even less acreage than is now used at prices that will cover costs and profits, would remain unsolved. Proposals for Expanding Markets .— That growers recognize the problem has been manifested at their meetings, lAiere the predominant opinion is that the way to improve the grower's position is to develop new markets and not to re- strict production, I Several writers have discussed ways to expand the market for flowers. chandising practices of retail florists, (2) expanding promotional programs. under three headings: (l) improving raer- lli/ Trotter, op. cit ,, p. Ul» iriCia.::..'!. i: ju^i^i: .qijUu ^:.xAc,:i p-t^^Kox-i 'i'-} tito'shaiKl rijiW .bS'jjIb tq 5o a:vCc>q[ u-*?-. joss -.'a ^^ix-u.^- . ; ■ . , * ' ■'■•'5.' c' ■ r.--i i(?,a e^-sifiafci wait lo as^flamllxxnu' ad? bm "enols di^voaB llo-.-; j-gX" od- aiel.rf •• rtCc.s'Vfjorf^' Jiipo Jjcbfce : bLxfodz tu^oo idgtm eRoonr 1c ? ;oI £ sJai-i uJ oJltisooiiia' ?aoi. f.'x^ 3'isXi;Bi&i ,£iC5i:d;xijbfi nl .Ix/Issqoow.iuj evo-xq i^cTis Ifinox^ono^q wsn' \;W Vo pm stcr.'xoll Xi«JoT /fixer K-irij YXisXt'oichccg bJ: siiil' .■\iXds'iov.3l iao gnimtfi -onxvxroo amos ifjjof-vtlW .seoiJOBiq artxXXa^ zuol-xev o& Qsxoi^oce't tsiooiaxfo atdxeabcr r;o .O'-isu e^f^xijnXl riortBoasTt oloiiixsv... .^-jiie laoi; uo xlsi aanxbni'i xio^-wa xas tse-Xas Xsxrsqa-^hssoqo'rq eboriJsm ari* iadj- wrfe oJ Xm snox^s-insndo \-.J-n«-?aX£Hei^e'i?;0'i5 Ltm.tfosrml bLuoir -ir- j-rransQiss oft YXnxBdieo ax afadT .mstao'xq Xsnox^oiriotq bohnsqx© gx -XXoq Xsnold-ocioiq i.:«>jdLt isxfcj- e^^w BXfoiisv ni aat3x*t3vbs wox£ a.M- Tc-ri flitj- 39avir:x3q>o Tcxsxij- j^fodB ei'sltoXl LtB^a-, 'io eoiJujiJ-d-B 9dt 3.:sr.jh:si'imm 1c dot d-fleXXso . '"^fiaxd-'j-f^v''.-- A ' ^ . ^ ., ». ^ „ „ ^ „ » „ . . „ ^ ^ ,,. ^ .. „ ... , „ ^ „ , ... ^ _ ,, „ „ .Yc--^5 .qq ,,fcidi 23. While there is no way of measuring the effectiveness of various promo- tional media or the total effect of all media on flower sales and net returns j it is evident that sales promotion activities in the floricultural industry- are relatively poorly financed. This is not surprising, considering the wide range of florist crops, the geographical distribution of growers, and the small operating capital in most such firms. One of the more imaginative plans to develop a market for flowers through 16/ youth education is described by Gatty.— His general thesis is that people do not use more flowers in the home because they know very little about the use and care of flowers or they have no particular desire for them. These factors limit all florist sales, according to Gatty, but the limiting factors might be considerably reduced by consumer education. The corrective measure would be to introduce flotirer-appreciation projects into the school curriculum as a supple- ment to the work in artistic design and home crafts. Such a program would be comparable to the activities of the American Dairy Council in using the schools as a vehicle for teaching proper nutrition and the place of dairy products in the diet. The inseparability of milk and health in the minds of most people in the United States can be associated with the intensive educational program fos- tered by the industry during the past 3$ years. I Prospects for Mass Merchandising of Floral Products . --Grower groups who advocate the development of new markets have usually taken the position that there are two types of markets, the "obligation" buyers and the home-use buyers, the latter constituting a potential source of demand that has scarcely been tapped. They believe that the home user market is an entirely different type 16/ Gatty, Ronald, A Market Development Program for Flowers Through Youth Education (Ithaca: 1957)) 13p. (Cornell University Agricultural Experiment Station A. E. 1083.) -nff;ciq si/oliBv ic sssneviiooTi- ■ ' ' ,iaLT.ansBr.i 'io an a.l' frisxij olirPt \,-j.!?.yfxrtJ: is avtlooi col i 3ri^ nr. ^'^^.L+ivfitoij acl^oivx-xq^ solus Jfj'flj- ^-^neti fn/o ; n.Bms oAi .S.Tf^ 2 If. -Ola iO noi-it'cfx'iJ'axfa Xaoirtqii^ob'^ or;* .sqorco vj-ai-soXl lo ©ahBi • " '• • • ' \6r ' • ■ . . . • sr-'' '-v'?B p£.+tJ. '■ vffv wom! ^s^^-^ ssi/eoocf ac.ori 9^;.+ nx e-xai/oXl" ©"xoiti eat; ; 9d' .tfifj. n ^.lOvnn;"'^ Bftf txaiX ortt ixfd ^x^&Si^ o& sfixbi'ocos ,.8 3Xbp.' isxioXi XXe .tla.ll' oj sci bit/Qv a-jt'esoii; ovijoei-co': ariT .fioi-j-Eoob© •K^.tiysnoo -^d beoi(f3«t-"jX'5s'iedi8rt03' -eXqcTK?, p e;c ;-'U;I(J3i:i'joo looft^g on; cicii afB.j' -'XXsweL' ovfn' e^oM-rsx vrsn lo d-nosrscroXoveb aitt' s^soo-'/fcs .P7^.-::i/o isexj-snroxi anj'- bus sifixisd "aoXjflgxXdb" eiU te,j9disfli lo aeq^d- owi sijs --i.^d* naod \leot^C3 asfi bnsneb lo ecino?, r.-^.J-rrs.tcq s ^C-i.trr+.j-.'snoo -to-t-tRr or'.-) Qc^rj d-flO'iollXb '^Xe'xx.tns nii ax &^->Hsr: leui. ;-r.;ofI ©rid- dftii.r •■.vyii„j .'.r,;''i .bgqq.".; (.£BOX ,a .A~^iiwj. 2h of market for flowers and that sales by mass merchandising through established retail food and variety outlets to home users would not detract from the busi- ness of established retailers catering to the "obligation" buyers. Efforts thus far made to sell cut flowers and potted plants in mass market outlets have met with varying success. Substantial progress has been made by growers in placing flowers in grocery supermarkets and variety stores. But the fact that a product is being sold by a mass market outlet does not mean that the product is being mass marketed. Occasional sales of cut flowers through supermarkets when there is a seasonal surplus do not offer the type of market expansion growers hope for. I A few trials of true mass merchandising of floral products are, however, currently in progress. These have been undertaken by a few of the larger food and variety chains, vAiich have taken the initial steps to establish their am. buying setup and to perform their own assembly functions in order to offer con- sumers a regular source of supply of a wide assortment of flovrers with a minimun of service. I On the other hand, some of the retail food chains that have explored the feasibility of handling florist items have decided against introducing them, primarily because they failed to see a solution to the supply problems. Until flower growers adopt a policy of selling through mass market outlets during all seasons of the year, even though there may be a price disadvantage on occasions, they will fail to meet one of the basic requirements of mass merchandising. Since a great deal of attention has been given to the possible advantages of mass merchandising of flowers, an examination of the known basic require- ments for mass merchandising seems appropriate, . ' ' io ff^'O'iitf 8i0vo.ri jsjo Io eeCas IsnoxafiooO •ba.tajiSian asam' gnio'-i- fei .ioubotq.&rij- tiovs'rtTon j9-is Q^oa'C'O^q X.P.10XI Io §nx8Xfjfmrio'iera scsit; eini lo- aXexTiJ vrol A .- srfi- iJStoXqxs flvsri indi fsrusrin brcl rcR+ec eri,t Jo emoB .hanrt' t--.-'-^'- '•1'^.* Xijn'J .enoldoiq vXqe^t;!: sxfd- o.J- noi^alos » f^B oi beXxs^. x^^'^^ sat'ciad v;Xii6m.i:-rcr ,>i"/Tjjh 3'^,r.+'n .+9i:i'T:jif» RRfcin rfnyn'.rrf.+ ,t.rirr? '^n ^'-Mcq iqobe s'T?t-7r-TT 'tnw-tX':. .. cuaibnsa'ofact BEa'n lo 3J'iia'>!£'xii;p©'.c oiesd erf.t '.0 orro ^eam o4" Xiel IXxw \;9fL' ,ev j.xqG*xqqG i^moaa grtiaibnsrioTiarfi aesi-i •lo'L 25. Requirements for Mass Merchandising j The object of mass merchandising from a business standpoint is to increase sales volume as a means of keeping unit costs at the lowest feasible level con- sistent with over-all operating efficiency. Many industries have found it nec- essary to promote sales in order to keep average unit costs within a competitive range. The need for volume sales increases as new technologies raise the fixed capital requirements for processing and distributing firms and when higher labor rates, social security, property, and business taxes must be offset by higher output as a means of reducing or maintaining costs. Furthermore, high-volume sales are needed to carry the cost of city-wide, regional, or national promo- tional activities. I Conversely, high-volume production can be maintained only when markets are ample to absorb the production capacity of an efficient firm. The experiences of many processing and distributing firms disclose certain prerequisites to mass merchandising. The more important of these firms require that the product: ,^ 1. Be available in adequate quantities at all times. 2. Have uniform characteristics. I 3. Be used regularly and Induce replacement or repeat purchase by the user. k. Be convenient to display and easy to handle. j 5. Be priced to appeal to a large number of people geographically concentrated to make feasible the development and use of the type of marketing facilities required to handle the product in large quantities. Availability . —There appears to be no question as to the availability of some flowers throughout the year in present retail florist shops. On the other hand, it is possible to have a shortage of some kinds of flowers. Since there is a high degree of sub sti tut ability among flowers, the problem does not appear ...i'iaif-ncrio'ioM .: ■^■jr.mh'shio..' -i^-d.JM«»Mcw ifW*Ml«riiiM Ml * ^IW^i ■ I IW I -riiTJi II i ilillwiil ■■■ )■ -- i" 'HOD X8VS.E ©Idi8c;'w t-Cfto bani.'j j'rtieffi nco rtoird-oiibo'^q er-toiov-xf-ijirl .xi©3'X9vrioO ' '' ' .mil cli!t9±ui^'i)6 m -^d-Jtoaqso ncWcuboTT- srfj^ dioa& b* slqnte uisdrteo 9coI.->8.fi) amil ;}ni<^«cfi:td-8ib baa yuaae>o^sia-miji*i<5:*w hris -Xioina d-eoM h^'fr-.t" r'.-f •'r>3 3'iSKOll isnoBsee ^^iisr ^-^irtsilqqfcB nrr. stneJi aX^Ei^B ee-HW' ©4i 'io . ■ ■ •• '-'?',■•• ' • . saiorl erid ::t .^s-rfafifli gni^eixs atit lo ad-aeina'jiijp,)i. 'o4rf o-^em 0+ v.t?i- 'cv .hrs ■. . ■ . ■» ■ . . t . I ■ ■ ■ ■" •' ■ ■' ■ ■ " ■.: - - . . . . , Xfi.tct nrfT .p.xe,-Q -sIxj^m a «o saswoll dth,- ^al.^jfo 2o sq^cJ- exrit soxxXqqrja nj 8ex^.i:IiO/5'l Drii .tae .•.?:aem lel -aXdsXiXivs. Yltr^Xii^fli f^JswboTtq «8*3i'ioXi lo ^Xqqcr.' -SieX Yfi i.».TJXipi^'ifli beiobisnoo bis (^.^-ic^e ictcarfiscrefo tee ^id-'si-iev bits ' 8"t?(5ii6i:. 0* 5'v-ft;?mc«fi^ .7X„/r.oo 0^ BiCT-ro't3 to tr:;nc>^i:Xr2i^nw .tng-rcqqfi erfT '.5T0Y;^d'xi^y8-i B!^l,7tye3P -ro'T noKsoT bocg gx' siadT .artxXXsa to ©qij.t' airiJ- 0* dnanoX- ^iir.ori:- I'.:;^A't s^-mJ. bXifO.ia siaupebeiii y,Xx^s-£oqmi scf hXirot'/BaxXqquB iwoXl *etk; •OiTbrJ: ':-,-!vJ- sdsLo s-xobsoX ^cid-eubfti ^levRvroH .e-in-^olt R-iv^irjcTV o.j- YXe-j'jrd-os ?f:.>5ec X'tiiiii^it bXi;ow tncx;j-xb;KJO ^©swm babivoiq ^x^lbtast noicf Djjfx>Tq hxTGq.} od' ••Jii'S ;Hid fix vd-iilCx&BO-i: £sci8\:riq s Sii xt-a^iorim: i Jtsiy.nl'-' ,y ji y ol |nir insb E^oxiwe n sibr-in >+oxi esri guM'^ticf ncx^coj ucooqa j^rfi tiavsv^ori tJ-nsierrqe b£i6. ..>' 4 ,{'."-0 aiewoX i •i»iido'''ba^---tsi;'?ffiV \..36'r:Mc/xc ■^ff^it.'-^n r. ri nox*3.toxi379b ■>.o . acfs-r-isrft-'aejS^'^deb 'oi ''jf^v s '..i oolfonsr! bnc L-.'.'.>iVx^ :i:U9g o-:.,. ei9jiB.3Si lo e5a6il odd- ii-t o'ltL iToxfE-T^nflT'o/Tiicr :j;ff ^qqiffe ' eiqir^ ^Xilst woLis bae noi^soxlxrjoqs- lo noxaneqxe •^.f.-jl+ittl: s '2 gallic "ine foXyorfe v.if.Pr .n-'iBrmnr ri h ic <=>di/i!ii;x!iyzluoj:t'-iBq ^zLemBd'~> bits Bbodtxn siT./:t9"rfts£i: beriaxXdsd-ae moil anicrlxris faex-rioji no'=)cf ovarl o.t e' -;.;93 :^'SX?(fiJ:rfj' 3fix',';XTBDij;; pri.t ,oaqol9Vi?b serf ^ssioini ob ••'■0ie Ovt annXq ^niiqolavab Tuis nl .>3C»isdnx anid el WitJije Io Br:o(:*iii a BA .floxd-ffv ~bs'jC9 motirui snxxfeildscfao fctte 3nxqcij"sv8b no eoaoielcoo Xs-f^oeqa ,ffl9Xcfo*£q Si-f^ • 3sLsT3 «riT .b^as^js'i^ lol 80ivr;i; vix^cjiix .i;! s srcr s&bjS'iT^ wio'itn-' ?i:ion i'f jrto'i av&d aoongialatq vjllBop e^^snaffanco ©rii 'tscfso o& e,i9Ls.&t6T: bite .-xsTTwenoo eri* XJfiB -inxoq safcqqxrfp, advt- iieswisd flor.+iSTciTred'e-b •'Ci^xlswp 5301^ seea*;.; 29. and temperature controls— were made on the premise that an identifiable quality- established at a shipping point could be maintained through the marketing chan- nels. In many instances this has not proved true. Consequently, some of the large retail food organizations have been purchasing fruits and vegetables in bulk containers and doing the sorting, grading, and consumer packaging opera- tions in their own distribution centers. The net effect is to shift the final quality determination nearer to consumers, thereby minimizing the time between final grading and sale to consumers. In view of the shifts toward bulk han- dling for many agricultural products, the cut flower industry could well afford to assess the economic aspects of shipping-point grading at the same time the physical and biological asfpects of the problem are being studied. Consumer reliance on product uniformity is strengthened by guarantees of " satisfaction or your money back" policies adopted by many retailers and manu- facturers. Such guarantees by retailers, in particular, are promotional de- vices used to associate quality with the retailer rather than the processor or manufacturer. Likewise, quality guarantees are an effective nonprice compe- titive weapon. ' Regularity of Use >— Mass merchandising depends on repetitive buying by consumers. Regularity of purchase and use enables groirrers, processors, and distributors to adjust their operations to market requirements. A better use of space, facilities, working coital, and labor is possible when managers can anticipate and plan for a fairly steady volume of business activity. Further- more, a more or less continuing flow of products or work permits businesses to operate with lower margins, thereby exercising a competitively restraining effect on prices. Observations of consumers' habits in floral purchases under the present marketing system throw little light on what to expect if floral products were mass marketed? and no studies as yet have been made on consumer buying habits in the limited masa- merchandising efforts that have been made thus far. ;vj:±i:;jjp sliifii'lirjKeM 'tii; SBtii sdjxtenq eric? no 9liri!n e'low— ^xo*i*hoo Btu&&iQ!ms& bns^ i* -t^moe •»'4i^«ot^»»'-- ■ ■ -■'vJ- bevd-rq d-o« "Hj^xI 'airfd Eeoflschsfti: '^rc.. . c.-. xii Be£QB*e33V brtfi B^'ixnl shfaflrfooug n90cf 6ysH sfloiisisxrra^io £>ool Ixsiet sg-i/il . .4-- tOBfi r'lircf hts^rc:^ c+lmn arid 1o wahr nT '.'e'ssiTttrenoo oi eXke bhi; jinfrb.oir^ Xra-'> meb Isnoi'JaD.TiQiq o-ss ^-Sitf ^■'i?•:^^a5'cr■ ft?! c^'^ vMi^ s-r y-u ^bqS it:snBls^ r^^f? . .. .. to^l"!: -^rpj^.o soiVqnorr svi-j-oe'tls ne oii"! ees^nft'tsi;! vdiijsjjp tpgrwojfU .'ismtcslt-hf. ' cAfi- t«5!"ioa a !T50iq t 3 let-rn'xa HeidjsiiQ eexf fans oserfoWq Ho •i^i-j:t£eXi;'^'?K ^^-a-rjimaoo ooa. T':'--nd A'- .aJnsocrtlape^ d-ei^'r-.r n.t sfioWBteqo liadd- i-ewti . - -CH/oxicfsi::/ -iSiit^fl"? .'^^.rtrld'ofi sBenisud 1» aTUflov ^£3*b "^jlTxel s •^o'' r^rrf c*rB «i.ti?qh .r.firj.Htrr no +09'i*ie . v-W aJ-iiin^u-xq IsioXl li JobqxB no &d^\i£ bZ&HL xiotiU mi^yyt aniiejiitr- B'tiderf §fi±y?;J lona/sfioo no eben rtosd nY*>f cfev: bb «»«^br*^ n-r ^^fc Jbs,t?>''fp<«! f??! ..^ 30. Convenience . —Competiti on among products for display, shelf, and storage space in retail food and variety stores is a major hurdle to the introduction of a new line of merchandise. Wholesalers of conpeting lines and noncorapeting lines encounter stiff sales resistance from retailers unless they can show that the new product will (1) be convenient to handle in the retail store, (2) re- quire a minimum number of changes in facilities and work methods, (3) be avail- able at conveniently located wholesale houses at all times, and (U) have poten- tial turnover and margin rates that will improve the retailers' net returns. When one considers the many thousands of food and variety items competing for shelf space in retail markets, there is little wonder that retailers re- peatedly ask, "Is it profitable for me to take on a new product idien it will mean dropping another?" and "Is the gross margin sufficient to justify the change?" Retailers are accustomed to surveying their alternatives and to se- lecting the kinds and qualities of merchandise they wish to sell. In order to break down the sales resistance of retailers to new lines, special inducements are frequently necessary. For such staple lines as fresh milk, butter, and ice cream, the proprietary brand distributors are forced to provide freezers, give price rebates or discounts, and arrange and pay for spe- cial promotion displays in and outside the retail stores. Bakeries give spe- cial concessions in order to get retailers to handle their branded products, the most common being to pick up any unsold bread or pastries. The effect of this is to permit the baker to display his products in the retail store and to do vdiatever promoting is needed. If the product sells, the retailer gets his margin J if it does not sell, he has donated display and shelf space which he could have used for market-tested merchandise. ^ Consumers often vant different product specifications than the retailers would like to offer. The degree to which consumer id-shes prevail depends en- tirely on their alternatives. Modern merchandising seemingly has catered to ^srit worlT /ISO Y9it+ ceoXnu atpliSvJ^s'x ' pioiI soneJaxaoi ealsc Hiie 'igixuioane BEniX -oT (5; ,e;to>e lis jet e>rtj ni sXbn'&rf oj insinsvijoo j-d" (X) 'X/.N- -j^r -'•-■^n'siit -ns>+ocT Bvsri (a) bfts ^sar.if XXb at>QiJorf «?XB?.ei''vih-i baiaotiL YX^ndinevnoo d-B eX'ii' ■ .• • .' • ' " ■ " jii • . -it -SI eia-LLs^s'i v+r-riJ lebAto*.'; sLiyilL el tsd'5?i'.!3m Xxcvtst xiX eofiqa IXorfe tC: XExirf ix riOi% douftc'sq wsn ; no 9>i£^ 0.+ - : Jil sXc'sd'.f'i-O'xq i'x ■'■ ,"?sb YXbe^soc ^r^^ Y'^.xia.at oi inel oillire nigism aaoiy stt^ ef " brts- "T-xeriiotie ^qqc^ib ii^o/n -9P 0-* hits aevivts.'irud'lB xtsd- snxYiwu/B bonoiEt'oos s'ls aieiis'eH "teynarb »XXs8 ciBh-j \'j»At eBJ±>mdoim. to i:^s:iiLsiUp bm ebobf edj- gniloeX ,sai;ij; wen e.'xeXiaJ'fii 'io eonftvtaissa E'sX'ia Qiii msob tin^tt oi lebm hi bso'iol e'loJ-i/cfxiicxb basid Ytstsliqo-iq erf^ tRi89i..> iv^. ,.uv ^/ /.u:. -eqa 101 y^sq bm egasitip, bns ^e-tfojoosib n-:- as&cdB" eai'iq svig tBTtsseo-i'l sbivoi'v ''c- ^ao'ilo &ff.T ♦aox-xiasq no fajseTc-j bXoanti '-^ns qi' ■'•(oXq oi gniscf r30fTCno& ieora srU oi bos emia XisiPt srtt -;.'r ^&ovf n'tc' nxd vsXqstt- c,t iml^-'i ""-rfi .t f s^^.^rr c.! j^X l^-'i ahi 8J j,i •iiili&io'i edi tfiX.Lo& ^:;.ui/Oiq f'rij "il .bsbesn ex ai:i.io.';:c>iq aaY&joiHv cl- aii rfoxrfw tosqe tCoife bng YsXqaXb beismb eerf ari ^XXcs *on eodb e:'i9^-^o>i'i.:~: icl; .'■•opn ■^vs.'^ f)ri''.'»" a'it.rxs.yo i 3fi.7 fiftfiT eftoXd-sox'ixorjqa .>C!A*bo iq J;ieT©llXb >taav asJ-'io c-iei.!X»&ac>U -as scfxsqeb Xlsveiq eerfsXw 'lei^tfefioo rfoiriw o<<- eai^eib exlT .'xello o.t esliX bXtct^ 31. consumer convenience in developing the supermarket mth its wide assortment of items that permit "one stop" shopping. A modification of the supermarket idea is the shopping center or cluster of specialty stores within a short distance of one another. ' A further move to serve the consumer has been the search for the most de- sirable packages, colors, trimming, precooking, and other measurable physical characteristics that affect consumer choice. This phase of merchandising is one of the most competitive aspects of retailing, and it is likewise one im- portant area in which consumer services exert an upward pressure on marketing costs. ' Prepackaging of flowers for sale to retail stores and consumers is in an experimental stage. From the standpoint of the retailer, prepackaging by the grower for consumer sale could have distinct advantages in handling. However, the consumer would not be able to inspect the contents of the package. Whether consumers would accept prepackaged flowers on large scale remains to be seen. Price Appeal .— In an effort to tap every income level, American industry has manufactured products for sale at various price levels and with varying quality characteristics. Excellent exan^jles of such product price-quality differentiation can be found in the food, clothing, housing, automobile, and electrical appliance industries. Frequently, the basic reason for the price difference is styling) on other occasions it is due to inherent structural differences viiich affect production costs. In one way or another, the objec- tive is to broaden the market base as a means of increasing sales volume and utilizing more fully the production facilities of the concerns involved. In some instances there may be no difference in the physical structure of the products lliat are sold at different prices. Yet, the sellers have successfully devised promotional methods that Bet poroducts apart from one another in the minds of the users even though the products are identical in every respect .»8cr»cr. '1 ■ • ■ " • ■ . ■ . . } ■^Jtijibiif: /iKozteri tXevsX emoofii ^^xeve qet ocf iioVis a& nl-— . 1 3 9<^q A eoj-r ^ ■fcfiXiix/p— soiiq 70isho-iq dtiiia to eaLqpisret jj!:.>i£eo:xiq oiiJ lui .TOf.GS'i r>izBd srl.t ^ iitrrsrfps^'I if cfeifbctl sojt/3iXq.\fc Xstjii-cjogX?' lafj.toxttJe tfi^-isrirri oab ex il snaxa^jocf.- t^iflo no igniXv«^ eX soneioiltT ijftij (jiTj/Xuv .-..Lfie j^"?i:asft'3u..ni 'io za^-.^y. • si as r-asd ; -j.^'ifM-fr artj n:.n; oio oJ ax S7ij ill ,b&vlc-;nx gfri^.oxion ©rii lo seltlXioBl ns'.fc-vbo'iq srii- "■cXXi/'l siof" ■^.is.i:i.t&v ©rf* nX tsiktons eno wot:! i'?-iqfi B.toifhcsq J-es ,i^riv i!fco:{Xs.r XjS.ciOl.jomaiq ^,>^?^- 32. except the brand name. A complete analysis of this type of selling for the cut flower industry would need to be tied in with the xAole concept of the economics of overhead costs or cost-revenue relationships. Such an analysis is not within the scope of this report. ' The extent to lAiich cut flower sales would be increased by placing more emphasis on price and less on service is not known. However, Oppenfeld and 17/ his associates-^' learned that consumers in Grand Rapids, Michigan, did re- spond to lower prices and fewer sejrvices. The Michigan researchers concluded that: "Customer approval of reduction of services, i.e., the cash and carry sale of unarranged flowers, was shown by their purchases and comments. The lowering of standards for suitable merchandise, i.e., short-stem flowers and smaller plants, also clearly met customer approval. These conditions are necessary if flower prices are to be reduced to a level that will create im- pulse buying." While no comparable studies have been made in the San Francisco market, the sale of short-stem flowers from street stands and small sidewalk shops at prices below those of established florists is claimed to be an impor- tant factor in maintaining higher than average level of retail sales for the city.^^ It would appear, therefore, that the average man or woman is far less concerned with the finer points of a perfect flower than are florists and plant breeders. Perhaps the industry might find it worth xdiile to learn whether flowers produced for "show" purposes best meet the needs of the household user. 17/ Oppenfeld, Horst Von, John F. Schwartz, and Paul R. Krone, Merchandis - ing in Retail Florist Shops (East Lansing: 1957), p. 9. (Michigan Agricul- tural Experiment Station Special Bui. I4I2.) I 18/ Goeppner, Edward, How Can I Use More Hawaiian Flowers in Our Retail Business ?( Honolulu; 1951), p. 81. (University of Hawaii, First Floral Clinic Proceedings.) 1 .... . ■ • ■.- ■ -f- ■ ■ ■•■ • ;;'! jc .J-r.-j.no 5 sXoff;-' 6iit dihr nl i--^x& s'x .eiftJ- '^.o eqoos erf* ciri^iw J-on ex ,. - . ... ■ . : .■...■>■ ''=' ; ' 'stem ^lokfq \c 'hcHBO'xoni oO bLu-y cvXbp rn-.-.ux Jijo xloirfw *no#xo eriT ' "bn& bl&tilbjyxO ^lis.Ts^.roH .XETO.iJi ion ax aoXv^ea fio ageX bns atJnq tic siejeri'T.nft •;. . ■ ■ •••M l' • ■ ■ \"r. " ■ ■ ■ ' ... • ■ ■*■ ' i- - ■' xu scf cd-' bemxsAo ?,x awSjiioX'jt t'Dd3i-Ctfi5..^c9 lo oeoriJ- wcXe"' •'•-■'Oj-x-? t? ;^ 'or!;' Sri* lol -.ers' lis^s-i 'io XqvsX ©ae'iCBVB xisriL lorirsxrl gxiinxfiJiii^iiii iix ■JOy.Dis'i: rned ar.rjX- tsi aX n^fnoir io nom ©jjcns^rs srlj dsAi t&iolft'xsrij ^ifisqqxj h£t»mf ^^^.^d-Xo JiiBXq"":!-"; a^^oXtcXl mi; mA:\ T'-.t-sc>jr}, vJoe'iiDq a io 3*0xoq feftxl erii '''■r • - .-.r . ■-xfliii'&riw nrtsel ra eXxxiv rij-'rcif iX hnxl Jri.aXra ^i.tarrbnx arlct aTPri'xsi .a-iebso't. .'leaij bXcr'sBijorf efi.t io sbstsn erf* ti'so Jseo' eoaoq'mq 'Vorif'' t:o1 I.-==>oc'hoic: ■^Tft'.^.'oX Ml X^ivrvh- r^iO jv'- • U I naO i- • -^S ♦•. '• \?X (. 33. The experiences of a few produce dealers in selling flowers, foliages, and potted plants are enlightening. Some dealers have found customers very- reluctant to pay more than a dollar for any one purchase of flowers or plants sold at a produce counter. On the other hand, Preble's Produce, Pasadena, California, began selling these items along with fresh produce a few years ago, but consumer demand caused them to add a number of special preparation services for ^ich the firm makes a special charge to the customers who want them. Preble's service-type flower operation is estimated to account for about 60 per cent of the dollar sales but only 2^ to 30 per cent of the volume in the flower department. ' The fact that most retail florists who started their flower businesses on a nonservice-type basis have shifted to a service-type operation should cause any active proponent of mass merchandising of flowers to pause. The reason for such a change in business policy could lie in (l) the desire of retailers to use their available labor and facilities more fully, which would be possible if they obtained a share of the service-type business associated with weddings and funerals, (2) the pressure of customers and potential customers for serv- ices in arranging or packaging flowers or plants for special occasions, or (3) a combination of the two factors. In any event, it is apparent that consumers are very price conscious when they are buying flowers for home use; they are much less so viien they are mak- ing occasional "obligation" purchases to conform to social customs. Problems of Market Development Conflicting Interests ,— One of the most troublesome questions about market expansion in the floricultural industry is what group should take the responsi- bility for needed changes in marketing methods. The prevailing grower attitude ause^j vB'i £ acybonq rfes-i'i- r'.tJrjr -afjoix. e-r^.s^x o;>s o^ J5fkc^;:^.:J^/?,^■ e.-. -n i-i.. .. .e.-^c? t9Wo£T: eq^-soxvict, a^t-xow^ i .I'-wu;. fto e©8S©rtiei'''J lawoil " -avi-, •.:iiw'idJu/ oi'ii-r. 3, /.gxI lisj;?-! d-spm ioat erfP ■^iQit^G'-- i)!!^)^ ifcidjj iXllu't. stotn 8&i.fi.rj->6't one T.odjjf ©IdsXxs^s tisitf^ spif 0+ -Jlsrt .-o'CB ■'{Slid' nsrii. or desX rbtfrt ^tiie '^srft t.9ey 3H!ori lo't etawcri i^iixfsd ©"rs -^ari* ,sB»J-&oo Xfiiocs Tclfloo oi ssafiilortuq "noJ:iiB§JtX.u.;":-..-^iu .oj.-^3£}-i J? lot ec^5??ln6."!j eXifl jil:>'fq o.t been 3ri* faxre XsvoL-xawcxs ©rij- ehoriiem . ^ -.^itucoeifc fiVsf? U'tai-.TCfs^ ^iuCe novn .bnc.) s^axJrii^a'i .lins 8'fsIsp.eXori T .^inn'^ftc.-q o.tGi:/>e!Kfnx 7i9xU JurU ■^1031!+ ?rf.^ no anewoXl ^aa naXbnedo-xm ..asm aiJuoi:^:* beaxB'j. ed oJ- saB.tctsvh£ runc-^nol on ed bXacw RTrerf* [:cs tcs>?*s faXtrow ii-.*si&75'*i!».c --^•i ii3uo'rf^v+ noisasqx*} ■?f»h:iEii-' ,sfciAt r,t<^_s eXjctt ip ^^si/soea .s^crio rvr-ja? nny.i *•^^!^q9^ eis Ofiw sieXfie'jXOiitir bns tfofiJimiX wf. O^ .^Xe^liX ^maQs aqorfe if»iioX'i , '^t ■i-on eis •■7,©Cg8 isXIob •xiorit ;j:o ^neo teq 0^ 9^ 26 -rol ^dftiioXl Xla^ft-? nf. .tns ,Ba.ti3ibnofi;'nep: 'tx> esq?^ lartcJ-o loisol to qolsveb at f^^^^il i9 . j.'iD'c'L-; iod-aiil auj iWiiiw Jrmii&iu tSiewig x-^woXl: >i'i:fa i6liisim.r!0i' 'tot di&X. 35 also to -Uie prevailing leadership in some of the trade associations. This formidable opposition to disturbing the status quo has a telling effect of the id-llingness of individual operators to experiment tdth new marketing methods. The inpetus to change appears to be coming from food and variety store operators who see possibilities for using mass-merchandising methods for sell- ing flowers and potted plants. Whether this interest can be maintained will depend largely on whether it is profitable. No doubt the profit picture will be influenced by the ability of large buyers to get adequate supplies of prod- ucts of fairly uniform quality x-athout incurring excessive procurement costs. Expansion of Direct Sales to Retailers .— It would appear that any e3q)an- sion of the sale of flowers and potted plants to retail food chains, supermar- kets, and variety stores could lead to more direct dealing between growers and retailers. For independent supermarkets this has proved true. Likewise, some of the food and variety chains permit their managers to buy seasonal flowers from local producers. But because of the inexperience of most of mass merchan- disers in buying and selling flowers and potted plants, and because of the lack of uniform grades that facilitate mass merchandising, there is a tendency for buyers for multiunit retail stores to rely on established commission-vAiolesalers and grower-idiolesalers as the only means of assuring themselves of the quality and volume needed for their type of organization. Nevertheless, as mentioned earlier, a few of the larger food and variety chains have taken the initial steps to establish their own buying setup. If this is done, it could bring about some drastic changes in the trade relations between growers and marketing agencies. ' Selling Through Fruit and Vegetable Vniolesalers . —Considering the insti- tutional arrangements and trading practices now current in the floricultural industry, growers might well think about using existing fruit and vegetable ^olesale houses as one method of placing flowers in mass retail outlets. The ♦^oil^e,'! ivtx.+sj.'rjjm iron rfixir ca n'-wi lsisk.t^±biii lo, eBongnJrl/x^- Xliv ii&uis^c:ji»m ocf joa^ ct.-.s'-ra^fti alttf Ttf:«x'i?,e!iJrf .f.diislq fcaJc!-oq bns eiswoll ^.ni: ■ .'fe^aoo .hiec!«>-a;30Trq 9VX2p.9o>3 ^ifjiiwo*!^ tticiHia x^U.L-i\p mio'Ucw ^(^tin't lo vipit Srca p.'s&vfO'X3 rtflsw+i'i ?,!iil£4>': >?v^x,;i- .s^jwh oJ- p^pji ibXw.o sotod^ y^°xibv bne ,5:.J-9->/ •B-rraifpIl l[i?n--?;a8s ^rf jrar^^s^nrn, •x.^^rp r-l^i^i^^^ j>iu:.^^i::^ .y^i-^l-ui-^ tm Kooi io * •'■ * -nsfii'jwfi eae.u lo j!*om to aomiicerscsax erij -Io •^grja^ie.irf .si-iJ? .sts^oubota Xfcool noil • i . "•• ' . .•''•..7'r' aai-rJ bli>f3 Jx ^snob ai siri^ 1:1 ..qjidsa atti^d ra.'? ixsrid riBxXda.+BS eqa^te ,33xr>n')^ • "-i^jsiu Slit sji'xgj',ierK>0-»-««a';,e£Be eIfliit^Jr>t.n .yr+rjfbrr.* 36. tjype of facilities required to handle fresh fruits and vegetables is quite similar to that used by florists, which would mean that very little additional equipment outlay for handling floricultural products would be required. A more important factor, however, is that T*iolesalers already have an established retail food store clientele, which immediately would be available as potential customers for floricultural items. Many vAiolesalers of this type ordinarily would be especially well situated to take on an additional line of products as a means of getting better use of their existing labor and facilities. At the same time this type of marketing arrangement would reduce some of the procure- ment problems of food retailers by making it possible for them to inspect their flower purchases along with other items bought from the wholesaler or to depend on the xdiolesaler to deliver acceptable qualities of flowers in the same manner he protects the interests of his retail store custcxners who order fruits and vegetables by telephone. A shift to fruit and vegetable wholesalers as a method of getting a wider and more economical distribution of floricultural products could have serious repercussions on many of the specialized floricultural grower-wholesalers and vdiolesalers now serving the industry. Yet, this procedure now appears to be an economically feasible way of increasing the availability of flowers to the general public and at the same time offering certain procurement and distri- bution cost advantages to growers and chain and nonchain marketing agencies. At least there is ample justification for a thorough appraisal of the extent and availability of physical facilities, sales organization, and management in ^diolesale fruit and vegetable firms that might be used successfully in selling florist products as a part of their regular wholesaling operation©. Competition for the Consumer's Dollar . -"Competition among sellers of prod- ucts and sdrvieefl Sot the consumer's expandable income is keen. Food, clothing, housing, furnishings, transportation, medical and dental care, education, taxes. . !?d-ii/p ex ■a^-£d£i'9g'£)V bm' ^^itn^ 'dfiS'z'i' 'j£bmi{i nlif h,r»bu:''^,r p/^t^i r^nr-"- "^.i o-i-H- t:,^!,ffeiEd6cj-K;fi' Its =*vsfl v^-.sBif.t eTcelfiPs/orft'^ >?ff.t f..': I'leve-vrox* .'io^ob^ .trrfttTiT"^?- :^'fo.-; . ?;<5 ^.t')i/bOTq lo ontL l^n.cl^i bhi' rir no o>!?.f ->■'■ I;,c.if,j;:..ri,'» aX^-.v T-II-ii-'o^'n:'? cr' "Slycn.-! raty^orq sfi^ Jo eroB ooiRDe'i''bXi)dw'^a9:me3iTfirrE" aaid-e^I'iB.'ji lo gqv;^ s-crfi artiJ- 6.<^s. i.tnrtt tri^QSiiiz TEff* tTT 3.f:i!.K**»V/r '^x"'''" '.} ^t'^yj'ti^-rr'f bor.J r>zc*' ■'^■xa iaoai -■ ■ - ' .■ : . -v. luAS!q:.c CO" to ro^cs^xorli.-? titU' ifoii Oii^'^o &ii*4'l itifLro iijj.r ^;cjJ_>3 ££ie6fi'v'''a;a 'jrewoll -'eq.fjsra, arise. blU Hi a?.«iWo'I'i lo ayivtilsup sXdiaitqiBOOs -tcvixub oi -i-sXasoXoriM ^iJ; no fojc:; "..^h'tJ. "Tob'jo orfjf BicsnKJ^aoo ©"xcJ-a XXSJ91 aixi lo ctsaio^tni: e.f-f e+oa^wq t'^'ch-! s §rri,tc?-35 lo bort^ea as a-xeX^eaCoriw elcfscJ-e.^ar bne dlsnl d-l/rfe A BJtrpi-T'-T. -T--^ bCj/co Rj-awfccw X" "r- ;. '."^r.-- • -iiidfc'/^iXb Xeoiinonooe erroc! bfuj bna iiXtJ.S8oIoifw-'iQv?o'£3 .CiB7JoaIijoi.-ioXl i>6j.s*iali(bq!; ©xij- lo xasm rto Giioieai/oisqei -i'^ciiiib bfis Jiiem0-n,'.')OT:q nhQdieo anitello anfcJ- srasr. arfj &e bus oxidbq Xsisnsg .^cioue^fi gniisjiicr! aXsriofton fcn*? nierio b.'m 3'fwroT«' f^e'^'^.tnev^p .t??©'^ "">?.+M j-neo-va ?>rid- lo Xseiaiqq* dgirortodif e lol no.:.-.'^.. i. ^.o^g yjc<;nti fr,r.ii. jB;;:;-;- A nl vfnscisaensni brts tnoivJs.^iiiii^o . oXsb toaxd-iXirosl Xcb.f:8v.rfq lo ^d'tXxrfBX.cBTf! brus .>uJ.ieB /u iXIx/lBasooifa bsaif scf .trf ;,-trt r-^rf.t •^.fnTf'* s.Wstp'i'^v h.ots .+ .(-.ot1 srf5;.-!f->f*-r 37. insurance, personal savings, and amusement for major expenditures appear to have a priority on the family income before flowers. Furthermore, flowers are only one of the many items that can be used for decorations within the home» A wide assortment of ceramics, plastics, fabrics, and furniture colors fulfills most of the color requirements for the home decor. In recent years, the use of artificial flowers and plants also is increasing, thereby creating additional competition in shape, form, and color for fresh florist products. ' The various analyses of consumer expenditures shoirr an average of less than 0.3 per cent of each dollar consumers spend for personal consumption items is used to buy flowers. The implication of such analyses is that consumers could raise their average expenditures for flowers greatly and thereby benefit them- selves and the industry. However, the cold reality is that the avocado, date, filbert, garlic, and dried prune groxrers and other industries, ad infinitum, can and do use the same reasoning. Consumers, on the other hand, continue to . establish their own priorities for buying products and services. These priori- ties, in a large measure, are influenced by the cultural backgroxmd and environ- mental conditions of each consumer when the priority is established. Up to now the cultural and environmental factors facing consumers have not placed purchased fresh flowers among the more important requirements in American home life. When- ever homemakers have a desire for fresh flovrers, the usual pattern in this coun- try is to satisfy such a desire with home-grown flowers, a tendency which is re- flected in the sale of garden seed, bulbs, and plants for home gardens. ' Opportunity for Development of New Industries Favorable .— Even though there is a wide assortment of highly competitive market-tested products with -which retail dealers can stock their stores, there remains plenty of opportunity to find retail outlets for new products or to induce retailers to take on an addi- tional product. Two conditions favor the introduction of new pzx>ducts and the 0& !te*>qqs. ae'tUwiljrt'iqxa .T:oi,i\. itSjiiioaWins £/ii8 tB3rti:vn?» r«'rfc?TBrT .o^ns'-ff;;.-''' • ••..^oa 9xtJ ai-rf^xw Bnoi:j£^o,oe.b ~to ad fie o J-oHj- ajraJi -^^ai ©li* 'to sno x^'^ Ki:L.t'tJLi3l-:excXoo eiJjixn-'ju'J he& ,eoiid^'l. t?-^-i^i?>-Iq ^aaxjttsvoo ^rttv^JTOas/; eb.f?,? i> nsiii'cT^i 'io 3§6'X9VB ris ^rorfe: co-^jo .^la^:^,.-.: 'ram/Krioo Rsa'^Isiis bj/oxisv en;- ux riii83i tiox^fqnif.'Eiict! Lrcioaxsq^^iQl hneqa ajaouranoo ^:^IIoi! .Iosp iti&o i&q £.0 Ji£x/oo. 3'i,'5ii:08noo ^erio ai esatXeas /ioiK^ a.>j:.j-^oiIgai !. .'"'r •eisvjoX'i T;rcf oct beai; ai ai'rtlj-iioo tOTarf ^i&ii+o «(W .''-^ tUisaa/BnoO .saiaosaeT omce ari^ esjja ofc br?c »-.vortiime fans bm/o-xa.'^OEd X&ixfjXtfo orfi -"jd l;03rtsj;Xlni taT:j;c;£offl o^xeX s at .esW —ss^iio'ri'CT hoafiXq ^t-ofl i-ive.i e-JaTo/saov -anxo^il eioitoi^l X&u*K5.ivi07X7ns bm Istu^Luo axicf '•.iiSftiV ...G'xXX moxTSfiwi xix B^aanoTJttfps'x vtnG.-Hoc^u atom odit aaos* BtsvoH rieo-ri — dxfjo •3i;£id'.fli..Txe.>^£q Xf=4/si; ©rfi ^.•3•setfoXl rieail tcl ©ixcab £ evod rrisjfBxnamod levo ?.i doxifcr '\;or-c»bjtBd- a tBiewoXl r&fo'is-o.tjod dJXvr 9ii:ct>b p, riox/e vl^rtps -tfij •anebias asiod nol eifl&Cq fci»? tedXad rrebtsa "in '•- -'^ c-it i ...... osXI siery- xistrflril iiay-aV- ♦ eXcfflirjwi_jigiTC.tr :■• \il vo?; ' 'yr;\ljto'^ - D riojrriiR d-tli^ 3^0i/bo*iq hedi80*«d'e3*iofr QV.tti.+fi'iffion ^{Xd^ ns no e:^* oJ- etslxB&st eoxjatx o.f a»/oiii3oiq vaa lol aiaXolro XiBd-ex bnxl 9iw bne ad-owbo'xq won "lo aotiovbcii^rti e>d* '^jvs'J E/K»J-:{-i:fcro3 owT ,&osibt>t ■ ■. .' ... ... ■ 3 as S7.^1x;; t.oliibnoo eldstovel. bnooss A .J-oi/boiq lo jj/u>f siaaa srW •j-. ju.bb'T.tnf ' - " ' '■■"•■'.•■>•. ... . ; .. ., .a-'tol.t^-xsqo Isn-xon g'm'sil (idd" dipf qirJanoxiBlsi ©fcsrT.t & xleUcfedse o.j ^{XXsidxxu "rriT-rcis c "io ^ilijs srfl' ■ ■ • ••. - ■. ■•. , .•. •.. rr-qo -J-qsjI ed noa isd-oX^uo rfoxra &cd} mm ion csob d-©XctjJ0 Ixeiei to alecaroit? s ■ ■ ' ' , . • - . . s.0:vr ...wv.- .... ..^.oxiq bcw tX*-^-^'"' " ' ' '.cdsIlBVB .+c>ijijnB ^slqgJJ:- .odAiipebe. p>f>ivo'XT o4i.jrt'?;,.;iisnr -siOs ri'o^a' risis'i i©:5ToI erf^- "ic- emos isirrtj-ia'Xdlfssb -tr^o'i Ic Isojtq^J-ru,' ion a! xjoivt^^jo'-!,-. L'.'V*' .'ts(?*rl i53t»ci-ni: •tn^i.rjl't-irie .'^vsf^."u3f^^"•8»?^!,":o^cT^n^ cf'^'^ od" •+rr»;>JTi.rb .t^. .fcrti;2i ^f,:ttiLisrf ifiixnie ,8^:>iiI;oiq[ dous '^ni'SSicsirL'^.Uy.-y.snsxsial bim Bntie-nij ^?''r",v; , f -*4»*t '.^^ ^4 »r* — rvy^ ■ • .' ' _ • ... . , • . •■ . •• ■ ■ • . ■ - - . . . 62.ctijjj-a oi'^ionooa t&rici^ bits' alxts ir.oi'i i.-jqoiovsb saois^ sriJ 'io siar-c-r f-r :•■:-") ,.;■ bnmnb'Xssiolt.Wbs blxhiiB .s'iuv -oil iijo -lo.. bnarcah sRiJ-eixa siil ■ -siiqqa •^n*' cJ-.ucii3xf ■ • \XL-j:qs-i b;jEjso'i.x!i-. nso a'^woXi. ■cfiro oc^ ebloBt I'Xocrfe eaiBiio ■\jrfaj:xBV tcc bool i-^^i&l ©rij lo ©iiios 'xl ^^fitcfelxs Jcff^ -^I&iO-Xfttf p-1 &i tS'itwcXt 1q aXse eri^ eiomctq orii xi*iv* eqo.? oJ- scfijapobs ed bXif?--,' eftcrifetn fctix; esitiXXaet (,3QlisLBLip ,BbnX3l ©rii- §nJ:v.Xqqiia bne sniXcfeeaefl to eKeXat^-tq "Bern tol x^qqsjs lo Bno.r^oni:'':- «tf^.t rl.off^-.' od >tned-xe strit tpbis • aiiexi/petexci a £3 noXiXi.: :.- -t^- i 'j e^aXJ-ro ■yulv'oji'ssf : t^iii'^OB , 3fd.Xd:fi9ss6 "xol sbEn arm jjxJojR.tvo'scj Xsioaqs ao-^Xrill and grading flowers groim on many small plots, large retail buyers are likely to have little interest in handling flowers without a very substantial markup to cover extra procurement costs. Established wholesale fruit and vegetable dealers might well be considered by growers as an outlet for cut flowers and other floricultural items. The basic assembly function would be equally valuable to independent and chain retailers, es- pecially during the initial stages of supplying flowers for a mass-marketing program. The statistics currently available on flower production, sales, and prices by kinds and qualities are wholly inadequate for any meaningful analyses. Therefore, the prevailing assumption regarding the expandability of the cut flower market by sell- ing bunched cut flowers through retail food and variety stores is largely speculative. Competition among retailers to maintain a "one stop" shopping center favors the sale of flowers in retail food and variety stores. Equally favorable to further development of the flower market is the fact that some retailers seek to use their fa- cilities and labor to a better advantage, and a few are in- novators who regularly experiment with new product combina- tions to attract trade. However, mass outlets such as retail food and variety stores ordinarily are not seeking new lines of products. Consequently, flower growers are faced with the problem of demonstrating the salability of flowers on a high-volume, low-margin basis. The initial responsibility lt»&9t Q'yu^L t^d-oiq xr.:.T no mroia e'ie^- It gpsS'iB-.n bxjs ■ •■•.*■. .aj-eoj • * 1 ft . >\ ,afiXi-.a tfloiicn,t.c':q -xsi-roll no sldRxLSvs ^iljrra'iii/o 30iit3/*fnie ©jfTT,- .il -IX^?; vo i3?ftfixf! lewoXl tiro edi'ln •^f±£t':^>tSr.-:i.K'S :#».lt o"V^'iSSQt aei- ^,^oi,'x;i-^!' brie hoot Xijed'eT ■ "^taueirfi- e'r$:"Ml-J?%ti».o-^'f.'U'-7i;i ? .. . ••"■'■'■•« ^" for developing or expanding the mass market for cut flowers rests with the growers. They can meet the requirements of mass-marketing agencies by proving their ability and will- ingness to supply these markets regularly with quality flowers, priced to compete for consiimers* favor. Ccaupetition for the consumers* dollar is keen. Flower growers must compete with sellers of food, clothing, hous- ing, furnishings, transportation, medical and dental care, education, taxes, insurance, personal savings, and amuse- ment. Furthermore, there is a large assortment of artifi- cial flowers, ceramics, plastics, fabrics, and furniture colors that fulfill most of the color requirements of the home. While there is a considerable question about the net effect of advertising on the total sales of flowers, there have been instances when federal-state Agricultural Extension specialists in cooperation with growers have used various sales promotion media to aid retailers in selling seasonal surpluses at considerably reduced prices. The effects of these distress sales on the regular flower market are not known. Consumer education on the use of flowers in the home offers some reasonable possibilities for increasing the long-run demand for flowers. The experience of the dairy industry in building up the demand for milk by encouraging schools to emphasize the value of milk in the diet is an outstanding example of product promotion. The introduction of flower- appreciation projects as a supplement to the work in artistic design and home crafts is worth considering. -IIl>r Jb-iTS Vv*ii7.cf<; T^-dt vjfx.'ivcTc V •^^■'';•^•^x:*■- T^^•';'v'.-..'^;- ' ■ ^vjV' -^./^ --^r S^ 'h:.ij\id'' Ii2. Bibliogjraph y Brunk, Max E., and Robert N. Hampton, Problems i n S elling Prepackaged Roses in G rocery S u pe r markets and Variety Stores (Ithaca: 1953) > 37p. (Cornell University Agricultural Experiment Station A. E. 930.) . ^ Fossum, M. Truman, Trade in Horticultural Specialties 1890-19^0 (Washington: Govt. Print. Off., 1953), 115p. (U. S. Department of Agriculture Marketing Research Report No. 33.) , Commercial Floriculture (Washington: Govt. Print. Off., 1955) J 75p. (U. S. Department of Agriculture Marketing Research Report No. 97.) Gartiner, Joseph, and J. E. Brewer, The Rhode Island Florist Business (Kingston: 1956) , 6p. (Rhode Island Agricultural Experiment Station Miscellaneous Publication No. U9.) I Gatty, Ronald, A Market Development Program for Flowers Through Youth Education ( Ithac a : 19'57)i i3p. (Cornell University Agricultural Experiment Station A. E. 1083.) Hampton, Robert N., Merchandising Flowers in Retail Florist Shops (Ithaca: - 1955), 19p. (Cornell University Agricultural Experiment Station A. E. IOOI4.) Moore, Elmer J., Wholesaling Floral Commodities in the Chicago and New York City Markets (Washington: Govt. Print. Off., 1957), 32p. (U. S. Department of Agricultural Marketing Research Report No. 175 •) Nxcholls, Charles A., Cecil N. Smith, and Donald L. Brooks, The Florida Foliage Plant Industry (Gainesville: University of Florida, College of Agriculture, Agricultural Experiment Station, April, 1958), 25p. (Agricultural Economics Mimeographed Report 58-10.) ^ Peters, C. W., Selling Hawaiian Floral Products, A Market Appraisal— Part I (Honolulu: 1956), kkp- (Hawaii Agricultural Experiment Station Bui. No. 10.) Rada, Edward L., Mainland Markets for Hawaiian Fl owers and Foilage (Honolulu: 1952), I6p. (Hawaii Agricultural Experiment Station Report No, 13.) (Final Report.) I Sherman, R. W., D. C. Kiplxnger, and H. C. Williams, Consumer Preferences for Cut Roses, Carnations, Chrysanthemums (Wooster: 1956), 7p. (Ohio Agricul- tural Experiment Station Research Circ. No. 31.) ^ Special Conference on Problems and Research Proposals Pertaining to Grades a nd Standards of Flo ricultural Crops in the United States . (On published Minutes of the Conference, Washington, D. C, February iO-11, 1955.) Taylor, Earl G., An Economic Study of the W ashington Metropolitan Flower Market (College Park: "'1956), i4lp. (Maryland Agricultural Experiment Station Miscellaneous Publication 275-) (, *oc^- xu- ' '"V" • 5 ^■iocjsH' tic'jsseeJI i^i^-^^n ij/cJ^fj/'- ■ > . w . , u i > ..J c . <^ X-i- .- -trier U3. Trotter, Warren K,, Problems in Marke ting Florist Crops (Ithaca: 19$^), 207p. (Cornell University Agricultural Experiment Station A. E. 983.) U. S. Agricultural Marketing Service, Crop Reporting Board, Cut Flowers (Wash- ington, D. C: 1957), I2p. (First Report.) U. S. Bureau of the Census, U nited States Census of Agriculture, 195U (Washing- ton: Govt. Print. Off.). I Von Oppenfeld, Horst, John F. Schwartz, and Paul R. Krone, Merchandising in Retail Flower Shops (East Lansing: 19^7). (Michigan Agricultural Experi- ment Station Special Bui, UlS.) 1 ••M V^n'-Ji/I-".